Resources Policy 25 (1999) 151–159 www.elsevier.com/locate/resourpol A high-potential sector: titanium metal Oligopolistic policies and technological constraints as main limits to its development Monica Cariola * CERIS, The Enterprises and Growth Research Institute, within the CNR (The Italian National Council of Research), Via Avogadro, 8, 10121 Torino, Italy Abstract Titanium metal is still considered an almost “precious” material, a niche market to be used solely for very specific jobs, instead it could be placed, with regards to production, consumption and application, among the stainless steels and Aluminium alloys. The aim of this work is to try to analyse the reasons why there is still a considerable resistance hindering a complete dimensional development of this sector, despite a great world abundance and large geographical distribution of titanium supplies as well as the excellent performance of the material itself: production restriction and a curb on development seen as endogenous variables seem to be a typical consequence of a basically oligopolistic market with technological constraints.  1999 Elsevier Science Ltd. All rights reserved. Keywords: Metals; Oligopoly; Entry barriers; Niche policy; Technological constraints Introduction The aim of this work is to try to focus and analyse the reasons why there is still a considerable resistance hindering a complete dimensional development of the titanium metal sector, despite the presence of a great world abundance and large geographical distribution of titanium supplies and of a considerable declared pro- ductive capacity of the metal as well as the excellent performance of the material itself. It could in fact be placed, with regards to production, consumption and application, among the stainless steels and Aluminium alloys, and not be considered instead as an almost “pre- cious” material, a niche market to be used solely for very specific jobs (Cariola, 1996). Many causes give rise to this situation and they are often linked: together they have created barriers that are sometimes real, but more often “formal”, or rather, “arti- ficial”, and have often blocked the entrance into the Titanium filiere of new economic subjects, discouraging even the investments that were already present and thus * Tel.: + 39-011-560-1236; fax: + 39-011-562-6058. E-mail address: m.cariola@ceris.to.cnr.it (M. Cariola) 0301-4207/99/$ - see front matter  1999 Elsevier Science Ltd. All rights reserved. PII:S0301-4207(99)00017-3 heavily limiting its development compared to its real potential. Literature on industrial organisation distingu- ishes entry barriers in a sector between “exogenous” and “endogenous”: the former are represented for example by economies of scale or by the high capitals necessary: the latter are on the other hand considered “the direct result of actions taken by the firms present and operating within an oligopolistic industrial sector” (Mathis and Koscianski, 1996, p. 264). In the case of the metal titanium, the picture described seems to reflect precisely one of the more classic forms established by economic theory: production restriction and a curb on development seen as endogenous vari- ables, a typical consequence of a basically oligopolistic market (Cariola and Gros-Pietro, 1992). A short introduction on the characteristics of the sec- tor and the metal may be useful to obtain a better picture of the situation. Short profile of the sector One limit to the development of the sector certainly did not come from the lack of basic minerals. In fact, titanium, as opposed to general opinion, is the fourth