Supply Chain Dynamics Subject of MIT Study
Ed Brown | January 24, 2017Will technological advances reduce the amount of resources taken from the earth to meet humans' needs?
That question is addressed in a new MIT-led study. Researchers studied "dematerialization," which they defined as reducing the amount of materials needed to produce goods and services. They studied the production of 57 different materials, goods, and services and found no evidence of dematerialization.
An MIT-led study finds that technological advances alone will not bring about dematerializationThe production of silicone-based semiconductors is one example that illustrates the general principles at work.
Technological improvements have greatly reduced the amount of material needed to make a single transistor, but the researchers say that consumers’ demand for silicon has outpaced the rate of its technological change.
In fact over the last four decades, the world’s consumption of silicon has grown by 345%. They found similar results for chemicals such as formaldehyde, ammonia, polyester fiber, and styrene. The same is also true for energy technologies such as crude oil, photovoltaics, and wind energy.
The aim of their research was to test a phenomenon known as Jevons’ Paradox. In 1865, the English economist William Jevons noted that reduction in the price of coal due to improvements in coal-fired steam engines increased consumer demand for electricity, thereby increasing the consumption of coal.
The MIT team developed an equation involving a number of variables, including population and economic growth, a product’s yearly increase in technological performance, and demand elasticity. For products with low demand elasticity, demand for a product is not highly affected by changes in price. They found that demand elasticity and technological change worked against each other – the better of product was made to perform, the more consumers wanted it.
MIT professor Christopher Magee, a co-author, says, "What it's going to take is much more difficult than just letting technological change do it. Social and cultural change, people talking to each other, cooperating, might do it. That's not the way we're going right now, but that doesn't mean we can't do it."