This is the second article in a series about the Titanium Economy.1 In future articles, we will dive deeper into sustainability in industrials and trends that will disrupt the industry.
In recent decades, headlines have chronicled the decline of manufacturing in the United States—and the decline of good, middle-class jobs along with it. But the coverage has almost entirely overlooked a vibrant sector within manufacturing: industrial technology. This sector, which we call the Titanium Economy, is brimming with high-quality jobs with good pay and benefits that could create opportunities for millions of workers across the country.
But creating the jobs and filling them are different stories. In the past ten years, 2.4 million industrial jobs went unfilled in the United States, costing the economy $2.5 trillion, according to McKinsey estimates. Furthermore, unfilled jobs were a primary reason that seven in ten companies fell behind in scheduled production, leading many industrial leaders to identify labor shortages as a challenge to growth.
Unfilled jobs were a primary reason that seven in ten companies fell behind in scheduled production, leading many industrial leaders to identify labor shortages as a challenge to growth.
Companies in the Titanium Economy are positioned to overcome the challenge of filling these jobs. The roles they seek to fill are good, viable jobs, which are the foundation of experience-based job progressions.2 In many cases, Titanium Economy careers don’t require a traditional four-year degree and pay on average more than double the wages of workers in the service sector, or 13 percent more than workers in comparable nondegree positions in the private sector. Additionally, these companies try to ensure working conditions are comfortable, with well-lit facilities and first-rate technologies— factors that contribute to increasing worker morale, productivity, and, perhaps most important, safety.
The Titanium Economy
By Asutosh Padhi, Gaurav Batra, and Nick Santhanam
The Titanium Economy is also positioned to provide education and career opportunities that could pay dividends for workers and their communities, as well as companies and their shareholders. So what can these companies do to address the manufacturing labor shortage? Some of the companies we profile in our upcoming book offer a few potential ideas on where to start:
- Partner with local trade schools and community colleges. Fluid-handling company Graco has built relationships with educational institutions in five states where the company donates capital equipment and offers scholarships. In 2021, this funding exceeded $1.3 million and has helped Graco repeatedly land on Fortune’s top ten list of Best Large Workplaces in Manufacturing and Production.
- Give employees clear pathways to advancement and offer training for upskilling. Waste-management company Casella has a robust program that gives every employee an opportunity for upward mobility—the driver of a rear-load trash pickup vehicle, for example, can train to become a front-load driver and later advance to a rollout driver, providing a pathway for workers to nearly double their wages in five years. Clear career advancement opportunities have allowed Casella to attract a younger, more energized workforce; as of 2019, 50 percent of its workforce had not been born when the company was founded in 1975.3
- Make employees owners. CSW Industrials, a diversified industrial company, made itself more attractive to recruits by creating an employee stock ownership plan funded through profit sharing. Employees own about 5 percent of the company.
These efforts could also be furthered by policies at the federal, state, and local levels—and US leaders could examine examples abroad. For example, Singapore has multiple secondary-school pathways that place students in environments tailored to their abilities; Germany has Meisterschules, or master schools, a national network of programs linking education and industry that focus on specific areas of expertise.
Titanium Economy companies could help revitalize the US middle class and spur inclusive growth in rural communities across America. But they cannot do it alone. Solving the country’s manufacturing labor shortage will take a coordinated effort involving industrial companies revamping talent practices, educational institutions refocusing training and upskilling programs on manufacturing, and local, state, and federal governments considering supportive policies and programs. Supporting the expansion of the Titanium Economy could help remediate the growth of income inequality in recent decades and broaden opportunities for more people.