Some argue that America is on the decline.

From ballooning government debt to prolonged conflict overseas to scandalous behavior on Wall Street, it’s easy to think that these talking heads might be on to something.

#-ad_banner-#Likewise, conventional wisdom says that American industry is “over the hill.” Many observers today believe that U.S. firms simply can’t compete with the likes of the emerging Chinese and Brazilian markets.

It’s certainly true that on a basic scale, those economies are growing faster. America’s 1.9% GDP growth last year doesn’t come close to China’s 7.7%.

Sure, America has its problems. There’s no denying that. But if you look a little deeper, you’ll find that there’s one area — perhaps the most important area — where America still firmly leads the globe.

Innovation.

Across the Fortune 500 landscape, you’ll find hundreds of American companies allocating huge sums of money toward research & development (R&D).

Just look at Forbes’ recent list of the world’s most innovative companies. Six firms out of the top 10 on the list are headquartered in the United States.

How many Chinese firms made the top 10? Not one.

But is innovation profitable for investors? Absolutely.

In my newsletter, Top 10 Stocks, my readers and I have benefited immensely — and very recently — from a group of companies that I call American Innovators.

These firms are pushing the limits of their industries and inventing entirely new businesses — the kind that change the way we live our lives and make investors a killing in the process.

A case in point is Alcoa (NYSE: AA), a homegrown company that was formerly one of the oldest companies in the Dow Jones Industrial Average.

You see, most investors thought of Alcoa as an “old world” business. And on the surface, that appeared to be true — the company generated a substantial portion of its income from making rolled aluminum for soda cans and other mundane items.

You would think such a firm would be headed for obscurity, as factors like cheap labor gave competitors in China and elsewhere a major leg up in this antiquated industry.

What the investing public failed to recognize was that Alcoa is an American Innovator of the first order.

Alcoa’s management realized there was no future growth in soda cans, so they set the company on a new high-tech course.

Using the company’s core expertise in aluminum, Alcoa pushed into several startling new kinds of business like military components and advanced aerospace machinery. The company even revolutionized the trucking business by creating a lightweight aluminum wheel for big rigs that reduces fuel consumption by up to 20%.

When my research team and I found out what the “real” Alcoa was up to, I added this American Innovator to my portfolio immediately. The timing was perfect — faced with negative investor sentiment around its perceived old-world business, the stock was coming off a five-year low.

What happened next was astonishing. The company announced a string of new contracts for its advanced products — including a $300 million order for its new aerospace division from industry heavyweight Spirit AeroSystems. And investors? They loved the new Alcoa. The share price rocketed upward within just eight months.
 

That’s exactly what American Innovators can do for your portfolio.

How To Spot An American Innovator
I always carve out a space for some of the nation’s truly innovative companies in my Top 10 Stocks portfolio. They don’t all land moon-shot ideas, as a company like Tesla has. But that’s okay. As our recent gain from Alcoa shows, when you find a company that consistently comes up with fresh and groundbreaking developments that can alter the dynamics of the markets in which they operate, it can lead to big profits.

Now, you might think that the example of Alcoa is an isolated case. But in fact, there are hundreds of U.S. companies making quantum leaps in technology and business just like the ones that led to Alcoa’s big gains.

Take, for example, the latest piece of research my team and I have been working on… it all has to do with the next great wave of innovation in the computing and Internet revolution.

Some have coined the idea I’m talking about as Internet 3.0.

You see, while phone companies continue to lay high-speed fiber optic cable, wireless cell tower operators install even faster switches, and satellite operators launch more complex and capable birds in the stratosphere, a group of companies is working on enabling a range of devices that will talk to each other.

If you recall The Borg from the TV show “Star Trek: The Next Generation,” you’ll have an idea of what I’m talking about. From phones to computers to kitchen appliances to car dashboards to a range of yet-to-be-imagined widgets, all items will be working in unison, in a sort of hive mind.

This isn’t just a series of exotic toys found in the homes of the world’s wealthiest citizens. Instead, it’s a technology eco-system system that will spread to billions of homes in the United States, Europe and the emerging markets.

To give you an idea of the magnitude of the opportunity I’m talking about, just look at what’s happening in China.

In 2007, just 16% of the population was online. Today, 46% of people are. It’s now the biggest Internet market in the world, and the Chinese people are using it more and more every day. People there are buying more things online, too. China’s online sales grew from 1% of total retail sales in 2009 to 10% in 2014.

Soon, China will join the United States and the rest of the developed countries in this “hyper-connected” world. And that’s just one example.

The message is clear: In emerging markets, Internet usage and connectivity are growing quickly. And in the process, it’s set to generate $3.5 trillion in new wealth every year over the long term for these countries alone.

Yet how that spending and wealth creation takes place is only one part of the story.

You see, in order to make this Internet 3.0 a reality — and it surely will be — it will take further advances in software and hardware, along with a completely revised way to obtain and process information.

Here’s where it gets exciting for investors: based on my research, one company stands to play a critical role in making this happen.

For the past several years, it has been one of the most dominant and visionary technology developers on the planet.

No, I’m not talking about Apple or Facebook.

As a matter of fact, I’m willing to bet the average person on the street has never heard of this company. Yet the firm deserves much of the credit for the technological innovations that have changed our daily lives over the past decade. I’m talking about the technology found in advanced smartphones, laptop and tablet computers, wireless base stations — basically any device that needs to communicate with a central network.

I can’t think of many markets that are seeing the kind of demand we’re talking about here, and far fewer where one company has the far-and-away lead in providing products and services for it.

In short, this company virtually owns one of the world’s fastest-growing sectors. And today, we can buy it for a valuation that’s unbelievably low.

My team and I recently prepared a report on this mega-trend, with more detail on the opportunity for investors in the months and years ahead. Facebook’s Mark Zuckerberg has called this “the greatest revolution yet,” while Google’s Eric Schmidt says that by 2020, “everyone on Earth” will be affected by it. To learn more about it, I invite you to follow this link.