Technological innovations including robotics, artificial intelligence, the Internet of Things and big data along with macroeconomic trends and changing consumption patterns are transforming the way resources are consumed and produced around the world. In How technology is reshaping supply and demand for natural resources, McKinsey shows how innovations reduce energy demand, substitute it and increase the productivity of its producers. Combined, these technologies could save between $900 billion to $1.6 trillion across the economy by 2035.
On the demand side, energy consumption is becoming less intense and more efficient. On the one hand, energy-efficient technologies are spreading into more and more homes and businesses. Improved efficiency could thereby generate savings of between $310 and $540 billion, while savings in transportation could account for $150 to $280 billion.
Technological advances could also lower the cost of renewables energies and increase their role in the economy’s energy mix. Thereby, they substitute fossil fuels with significant effects for producers and consumers.
On the supply side, resource producers are now able to leverage technologies making energy sources accessible that were previously inaccessible. While reduced demand accounts for about two-thirds of energy savings, the increased productivity of resource producers generates another third of costs savings across the economy.