It is evident that over the years the production cycle and processes have undergone a significant facelift. For almost a decade, the commodity prices of gas, oil, and metal have been like a rollercoaster, with prices shooting up for a while before dropping drastically.
Nonetheless, as mining companies try to come to terms with the mixed commodity prices that have been the norm for quite a while, they now face a fresh challenge. Step forward technological innovation. Technological innovations bring forth an era in which manufacturing processes are adopting artificial intelligence, robotics, IoT (Internet of Things), and data analytics.
Effects of Technological Innovations on the Global Economy
In a nutshell, technological innovations are affecting the way raw materials and commodities are consumed and produced.
What Studies Show
Global institutes, such as www.grsconsultants.com, say that innovative technology could release an average of 1.25 trillion dollars into the world’s economy by 2035. And this is not a small amount by any means.
What’s more interesting is that at least two-thirds of that amount are a result of reduced energy demand on the back of higher energy productivity. The remaining one third is derived from production savings by commodity producers. Also, the need for oil may increase over the next 20 or so years, and prices could fluctuate uncontrollably.
Nonetheless, for this opportunity to come to light, many factors will come into play. First will be the rate at which technological innovations will be adopted and implemented. Second will be how commodity producers and policy makers adjust to this new era.
Policy Makers and Technological Innovation
Policy makers have a considerable role to play in helping unlock the potential of technology in industries. First off, they could try to seize the advantages of technological innovations on productivity. The revolution facing policy makers and commodity producers seems to be complicated. However, the benefits of increased productivity and an economy that is less dependent on resources make it a risk worth taking.
The Demand Side
Taking a look at the demand side, energy usage or consumption is dropping by the day. This has been thanks to energy saving efforts by people in their homes and workplaces. Additionally, energy saving and efficiency trends are now becoming a norm in almost every household and business.
Also, technological innovations and advancements are helping to cut down on the prices of renewable energies such as wind and solar. All these have improved the stake in renewable energy in the global energy grid, opening considerable effects for both producers and users of oil and coal.
The Supply Side
In the supply realm, manufacturers of raw material are also using tech to simplify their operations. For example, oil miners can now drill wells into oil deposits that were thought to be inaccessible a couple of years ago.
All these have seen a boost regarding the efficiency of mining techniques which has encouraged a move towards analytical maintenance. Additionally, commodity producers are using advanced data analytics schemes to identify, mine and manage resources.