Underappreciated, Undervalued, And Misunderstood: The New Fortune In The Titanium Economy

Enterprise Tech Underappreciated, Undervalued, And Misunderstood: The New Fortune In The Titanium Economy Roslyn Layton Senior Contributor Opinions expressed by Forbes Contributors are their own. International Tech Policy Following New! Follow this author to stay notified about their latest stories. Got it! Oct 13, 2022, 05:57pm EDT | New! Click on the conversation bubble to join the conversation Got it! Share to Facebook Share to Twitter Share to Linkedin Worker in a Titanium Economy factory getty There is a manufacturing renaissance afoot in USA led by small and mid-cap companies.

These companies earn returns that rival the online tech/software sector. They are not widely known or discussed, but there are some 4000 of them, driving about $200b in revenue. Their startup costs are relatively low, and they take advantage of 5G, AI, robotics, automation, and cloud computing.

The future of the American economy is hiding in an unlikely place, contend the authors of The Titanium Economy: How Industrial Technology Can Create a Better, Faster, Stronger America , Nick Santhanam, Gaurav Batra, and Asutosh Padhi And yet, US industrial policy is missing this emergent trend. It is overly focused on semiconductors and industrial behemoths like Intel, AMD, and Nvidia not on the micro-enteprises which create jobs in small and medium-sized communities. Moreover media likes to continue the portrayal of the rust belt, hallowed out America.

The authors have pulled together the good news stories of the Titanium Economy firms flying under the radar, rejecting the Rust Belt media narrative. The companies can be divided into some 90 micro-verticals producing inputs for the automotive, aviation, electronics, homes, food/hospitality and other industrial verticals. Many firms innovate in the sustainability sector, like Trex, the world’s largest manufacturer of wood-alternative decking and railings.

Other find innovate ways to reduce food waste Sealed Air and Scott Equipment Company. Or Graco, the world leaders in “flow control”, fluid management products and package that ensure that peanut butter fills jars neatly at industrial scale. The authors describe the value proposition to “drive value by leveraging technology to use data more intelligently and to create products that add substantial value for their customers, assuring they will pay more for them.

If you’re manufacturing a mixer or a pump, for example, you can add smart sensors to track the health of the equipment and diagnose maintenance issues more proactively. You can then share that data with your customers, which helps them run heir businesses better, making the value you’ve generated for them clear. There’s nothing magical about margins; you raise them by improving your products and performance to provide the extra value customers will pay a higher price for.

We’re not talking only about revenue growth. If companies now have a 5–10 percent EBITDA, we’d want to see them reach 15–20 percent EBITDA. ” There is no one geographic center for the Titanium, but many on the fringes of major cities.

Some set up next to a technical university or the Cold War manufacturing centers. Many are in Florida, part of burgeoning movement for tech and investment outside Miami, now America’s fastest growing tech city Standouts include aerospace electronics firm HEICO in Hollywood, FL; Orlando’s Qorvo (the company that enables you to talk and text into your smartphone at the same time), and the Tampa area Welbilt and CaptiveAir, both innovating in the industrial kitchen space. MORE FOR YOU They Inherited Billions Upon Billions: Meet America’s Richest Heirs The B-52’s A Blast As Farewell Tour Winds Down In Chicago ‘A Friend Of The Family’: Jan Broberg Talks About How She Was Groomed By A Predator Readers will recognize stories of independent, self-starting engineers and entrepreneurs who see opportunities that few others do.

Most are private or family-owned business and bootstrap their investment. Important macro changes to the economy are driving the growth of these firms, including the ubiquity, availability, and affordability of technology. However supply chain shocks, increasing costs, insurance, shipping time, delays, and the unpredictability to produce in China are also fueling the Titanium Economy.

Proximity to customers matters. Human capital is a critical element of the Titanium Economy. A common feature is a highly-motivated, non-unionized workforce who make earn enough to raise a family (twice what they can earn in the service sector) and spend time in their communities.

Titanium Economy jobs are in modern, clean factors where the de facto uniform is polos, chinos, and sneakers. The companies are working hard to market themselves to women and people of color. However the lack of skilled labor in the US overall is a key risk to the sectors.

US schools are just not getting the job done to the produce the workers, as they fail to incorporate apprenticeships and technical education. Follow me on Twitter or LinkedIn . Roslyn Layton Editorial Standards Print Reprints & Permissions.