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Beyond the Supercycle: How Technology Is Reshaping Resources
February 17, 2017
Technological innovations, along with macroeconomic trends and changing consumer behavior, are transforming the way resources are consumed and produced.
A new report by McKinsey, Beyond the Supercycle: How Technology is Reshaping Resources, finds that these trends have the potential to unlock roughly $900 billion to $1.6 trillion in savings throughout the global economy in 2035, an amount equivalent to the current GDP of Canada or Indonesia. At least two-thirds of this total value is derived from reduced demand for energy as a result of greater energy productivity, while the remaining one-third comes from productivity savings captured by resource producers. Demand for a range of commodities, particularly oil, could peak in the next two decades, and prices may diverge widely. How large this opportunity ends up being depends not only on the rate of technological adoption but also on the way resource producers and policymakers adapt to their new environment.
According to the report, projected benefits of these disruptive technologies include:
- Raising productivity and improving safety in all areas of mining operations
- Making the oil field of the future safer and more productive
- Changing the ways consumers live and reducing resource consumption
- Enabling a more resilient grid and more responsive and productive utilities
While the changes facing resource producers and policy makers are likely to be complex and numerous, McKinsey has found that the rewards of greater productivity, faster growth, and a less resource-intense economy can benefit all, unlocking billions of dollars of value for resource producers from productivity gains and trillions in savings for the global economy.