Dematerialization: How We Can Prosper Using Less

How capitalism, technological innovation, and human ingenuity are changing the relationship between economic growth and natural resources.

For centuries, economic growth meant consuming more. More trees were cut down, more minerals extracted, more farmland cultivated, and more energy burned. But dematerialization is challenging one of the oldest assumptions in economics: that becoming wealthier necessarily means consuming more natural resources.

In his book More from Less: The Surprising Story of How We Learned to Prosper Using Fewer Resources—and What Happens Next, MIT researcher Andrew McAfee presents a fascinating argument. Modern economies, particularly wealthy countries such as the United States, have started producing more goods and services while using less of many important raw materials.

What Is Dematerialization, and Why Does It Matter?

Dematerialization is the process by which an economy produces more economic value while consuming fewer physical resources.

Imagine a country whose economy grows by 30%, but whose total consumption of steel, copper, paper, and timber declines. That would have been difficult to imagine during the Industrial Revolution, when economic expansion generally required more raw materials.

Today, however, this phenomenon is observable in several advanced economies.

Economists call this absolute decoupling: economic output increases while the total consumption of a particular resource decreases. It is different from relative decoupling, where resource consumption still increases, but more slowly than the economy.

McAfee argues that technological innovation, competitive markets, public awareness, and effective government policies have helped make this possible.

1. The Smartphone: A Perfect Example of Producing More With Less

A modern smartphone on desk surrounded by vintage camera calculator alarm clock paper map music player radio GPS compass and books. The smart phone have replaced all those objects and more. — The smart phone have replaced all those objects and more.

Consider one of the most remarkable inventions of modern times: the smartphone.

Just a few decades ago, we needed numerous separate products to accomplish the tasks that a smartphone performs today. Each product required raw materials, manufacturing, packaging, transportation, storage, and eventually disposal.

A smartphone has replaced, or substantially reduced the need for, many everyday products.

Products That Smartphones Have Replaced

Photography and video equipment

Compact digital cameras and disposable cameras
Consumer camcorders
Photo albums and printed photographs
Separate photo-editing devices and tools

Music and entertainment

Portable CD players and cassette players
MP3 players and iPods
Portable radios
DVD players for watching movies on the go
Handheld gaming consoles for many casual games

Navigation and travel

Paper road maps and city maps
Standalone GPS navigation devices
Travel guidebooks
Compasses for everyday navigation
Printed public transportation schedules

Communication

Landline telephones for many households
Answering machines
Pagers
Fax machines for many routine purposes
Telephone directories
Postcards and some printed correspondence

Office and productivity

Pocket calculators
Paper calendars and appointment books
Address books
Notepads and shopping lists
Voice recorders
Portable document scanners
Physical dictionaries and encyclopedias

Everyday accessories

Alarm clocks
Stopwatches and timers
Flashlights
Wristwatches for some people
Dedicated weather instruments for everyday forecasts

Of course, smartphones have not completely eliminated these products. Professional photographers still use specialized cameras, and many people still enjoy physical books, watches, and music equipment.

Nevertheless, the amount of functionality concentrated in a single device is extraordinary.

A smartphone weighing approximately 200 grams can perform tasks that previously required several kilograms of separate equipment.

This is dematerialization in action.

There is an important qualification: smartphones also require minerals, electricity, data centers, telecommunications infrastructure, and regular replacement. Their environmental benefits depend on their full lifecycle, not simply the number of gadgets they replace.

Still, the smartphone illustrates how innovation can dramatically increase the economic value created from a relatively small physical object.

2. How Capitalism Encourages Businesses to Use Fewer Resources

Capitalism itself can encourage resource conservation. Businesses have a powerful incentive to reduce their production costs. Every kilogram of raw material they avoid purchasing represents potential savings.

Consider an entrepreneur manufacturing 10 million products annually. If technological innovation allows the company to reduce the amount of material used in each product by 20%, the savings can be enormous.

Competitors have an incentive to imitate these improvements or discover even more efficient production methods.

Over time, this competitive pressure can lead to an entire industry using fewer resources.

The Aluminum Soda Can: A Remarkable Example

A greate example of how business are using fewer resources is the evolution of the aluminum beverage can.

Early aluminum cans around 1960 weighed approximately 85 grams. Modern versions weigh less than 13 grams.

Aluminum Cans: More Than 84% Less Material

One of the most impressive examples of dematerialization is the aluminum beverage can.

Around 1960: An aluminum can weighed approximately 85 grams.
Modern cans: The weight has fallen to less than 13 grams.
Material reduction: More than 84%.

This remarkable improvement was achieved through better engineering, thinner aluminum walls, and more efficient manufacturing techniques.

Companies were motivated primarily by reducing costs, but the environmental benefits were significant.

The lesson: Capitalism can create powerful incentives to conserve natural resources while increasing productivity.

Manufacturers achieved these reductions through better engineering, improved metal-forming techniques, stronger can designs, and thinner walls.

They were not primarily motivated by environmental activism.

They wanted to save money.

But the environmental benefits were substantial: less aluminum was required for each can, reducing material demand per unit and potentially reducing energy consumption and emissions.

This is an important lesson about entrepreneurship: the pursuit of profit can sometimes align with environmental conservation.

Of course, profit incentives alone do not solve every environmental problem. Pollution and carbon emissions can impose costs on society that businesses do not automatically pay.

That is why markets need appropriate environmental rules alongside innovation.

3. Economic Growth Without Increasing Natural Resource Consumption

For much of the twentieth century, American economic growth was accompanied by increased consumption of nearly every major raw material.

But around the 1970s, the relationship began to change.

The economy continued growing, while the consumption of numerous materials slowed, peaked, or declined.

Examples of Resources That Have Peaked or Declined

McAfee discusses the following examples, drawing on historical American resource-use data:

Resource	Historical pattern discussed
Iron	Consumption has passed historical peaks
Steel	Use has declined from earlier highs
Copper	Consumption has peaked and declined
Nickel	Use has passed historical peaks
Gold	Material-use data show declines from earlier peaks
Paper	Consumption peaked around 1990
Timber	Consumption peaked around 1990
Fertilizer	Use has decoupled from continued economic growth
Various industrial minerals	Many have passed historical consumption peaks
Energy	Total U.S. use was roughly flat between 2007 and 2018

These are historical observations from the book and podcast, not claims that every material continues declining today.

Among approximately 72 minerals tracked by the U.S. Geological Survey, all but about six had passed their historical peaks at the time of his analysis.

There are important exceptions, including plastics, whose consumption continued increasing.

The distinction matters. Dematerialization is not universal, and a decline in domestic consumption does not automatically establish that a country’s total global environmental footprint is shrinking.

Imports, overseas manufacturing, resource extraction, and supply chains must also be considered.

Nevertheless, the evidence suggests something important: economic prosperity does not always require increasing the physical quantity of resources consumed.

4. Agriculture: Growing More Food Without Using More Land

Agriculture provides another powerful example of technological progress.

Historically, feeding a growing population meant clearing more forests, cultivating more land, and expanding agricultural production into new territories.

Today, modern farming techniques allow farmers to produce substantially more food per hectare.

Important innovations include improved seed varieties, fertilizers, irrigation systems, mechanized equipment, precision agriculture, satellite monitoring, and better pest management.

Consider a farmer who previously produced three tonnes of wheat per hectare. If new technology allows that farmer to produce six tonnes, food production can double without expanding farmland.

This matters enormously for environmental protection.

When agricultural productivity increases, societies can potentially avoid converting additional forests, wetlands, and natural habitats into farmland.

In some places, abandoned or less productive agricultural land can even return to forest or other natural vegetation.

However, higher yields do not automatically guarantee land conservation. Demand for crops, government policies, and agricultural expansion can still increase land use.

The lesson is that technological innovation creates the possibility of producing more food while placing less pressure on nature.

5. Energy Efficiency: Growing Economies Without Growing Energy Demand

For most of modern economic history, higher economic output required higher energy consumption.

Factories needed electricity. Transportation required fuel. Homes and businesses consumed increasing amounts of power. But there is an extraordinary development in the United States.

Between 2007 and 2018, total American energy consumption remained approximately flat, even though the economy grew significantly.

This was possible partly because of improvements in energy efficiency.

Modern LED lighting consumes substantially less electricity than incandescent bulbs. Newer appliances often require less energy to perform the same tasks.

Industrial processes have become more efficient, while digital technologies help businesses monitor and reduce unnecessary energy consumption.

Economic changes also matter. A growing service sector can generate substantial economic value without requiring the same quantities of physical materials as heavy manufacturing.

Still, energy efficiency does not automatically reduce emissions. The environmental outcome also depends on where energy comes from and whether increased demand offsets efficiency gains.

That brings us to another important topic: nuclear power.

6. Why Nuclear Energy Deserves a Place in the Environmental Conversation

Nuclear energy should be taken seriously as part of the solution to climate change.

Nuclear power plants can produce large quantities of electricity with very low operational carbon emissions.

Unlike solar and wind generation, conventional nuclear plants can provide electricity around the clock, regardless of weather conditions.

Nuclear power also has a relatively small physical land footprint for the amount of electricity produced.

This makes it particularly interesting for economies that want to maintain high living standards while reducing greenhouse gas emissions.

Of course, nuclear power involves legitimate challenges: construction costs, project delays, radioactive waste management, safety, and public acceptance.

But rejecting nuclear power entirely may make decarbonization more difficult in some countries.

Rather than choosing one energy technology, societies can evaluate nuclear power alongside renewables, energy storage, improved electricity grids, and efficiency measures.

Technological progress can help solve environmental problems without requiring society to abandon prosperity.

7. Were Thomas Malthus and William Stanley Jevons Wrong?

The debate about resource scarcity is not new.

Thomas Malthus: The Fear of Running Out of Food

In 1798, economist Thomas Robert Malthus published An Essay on the Principle of Population.

He argued that population growth would tend to outpace food production, eventually producing famine, poverty, and misery unless population growth was restrained.

Malthus underestimated the transformative power of technological progress.

Agricultural machinery, fertilizers, improved crop varieties, transportation, and modern farming practices enabled food production to increase dramatically.

That does not mean hunger has disappeared. Poverty, conflict, distribution failures, and environmental shocks continue to threaten food security.

But the catastrophic population-and-food relationship Malthus anticipated has not unfolded as a universal law.

William Stanley Jevons: The Efficiency Paradox

In 1865, economist William Stanley Jevons observed something counterintuitive about coal consumption.

As steam engines became more efficient, coal consumption did not necessarily decrease.

Instead, greater efficiency made steam power cheaper and more attractive, encouraging wider adoption and potentially increasing total coal consumption.

This became known as the Jevons paradox.

It raises an important question: if technology makes resources cheaper to use, won’t people simply consume more of them?

Sometimes, yes.

For example, more fuel-efficient cars can make driving less expensive, encouraging people to drive additional kilometres.

But this outcome is not inevitable for every resource.

If the total demand for a material stops increasing while businesses continue improving efficiency, overall resource consumption can decline.

The historical American evidence suggests that efficiency improvements and economic growth can coexist with falling consumption of certain resources.

Jevons identified a genuine economic phenomenon, but it is not an unavoidable outcome in every industry.

8. Can Capitalism and Environmental Protection Work Together?

Environmental debates frequently present capitalism and sustainability as opposing forces.

According to this view, businesses seek profits, consumers demand more products, and economic growth inevitably damages the planet.

But competitive markets encourage businesses to innovate, reduce waste, discover substitutes, and improve production efficiency.

Entrepreneurs are constantly looking for ways to deliver greater value at lower costs.

Sometimes, those innovations also reduce environmental damage.

But capitalism is only part of the solution.

The importance of four forces working together: technological progress, capitalism, responsive government, and public awareness.

Government regulations can help control pollution, protect endangered species, and establish incentives for cleaner technologies.

Consumers and citizens can demand environmental protection, while entrepreneurs develop solutions that make cleaner production economically attractive.

Together, these forces can create an economy that becomes both wealthier and more resource-efficient.

9. The Limits of Dematerialization

It is important not to exaggerate the argument.

A country using less steel or paper does not necessarily mean its overall environmental impact is declining.

Several challenges remain.

First, wealthy countries import many manufactured goods, meaning some resource consumption and pollution occur abroad.

Second, the global demand for materials such as plastics, concrete, and minerals used in batteries and electronics remains substantial.

Third, climate change, biodiversity loss, water scarcity, and pollution cannot be measured simply by counting tonnes of materials consumed.

Finally, efficiency gains can sometimes encourage additional consumption, as Jevons warned.

These limitations do not invalidate dematerialization. They remind us that it is one important part of environmental progress rather than a complete solution.

10. Why This Matters for Entrepreneurs and Our Future

Entrepreneurs create value by discovering better ways to satisfy human needs.

Sometimes that means inventing entirely new products. Other times, it means finding ways to produce existing products with fewer materials, less energy, and less waste.

A company that develops a lighter package, a more efficient engine, better agricultural equipment, or a software application that replaces several physical devices may simultaneously create economic and environmental value.

That is an encouraging possibility.

We do not necessarily need to choose between a prosperous society and a healthier planet.

We can pursue both through innovation, competitive markets, thoughtful regulation, and continued scientific progress.

Conclusion: The Future Could Be More From Less

For centuries, economic growth and resource consumption moved together.

More prosperity generally required more land, more energy, more metals, and more materials.

But the relationship is changing.

The smartphone illustrates how a single device can replace numerous physical products. Aluminum cans demonstrate how competition can dramatically reduce material requirements. Modern agriculture shows how technology can increase food production without proportionally expanding farmland.

Meanwhile, improvements in energy efficiency and low-carbon technologies offer opportunities to support economic growth while reducing environmental pressure.

Andrew McAfee’s central message is optimistic without requiring us to ignore environmental problems.

Human prosperity does not have to depend on endlessly increasing our consumption of natural resources.

The future of economic growth may depend less on how much we extract from the planet and more on how intelligently we use what we already have.

That is a future worth working toward.

Frequently Asked Questions About Dematerialization

What is dematerialization in economics?

Dematerialization occurs when an economy produces goods and services using fewer physical resources. Absolute dematerialization means total resource consumption declines, even while economic output increases.

Can economic growth happen without using more natural resources?

Yes. Some advanced economies have experienced periods when GDP increased while consumption of certain materials declined. However, this does not mean every resource or every form of environmental impact is decreasing.

How does capitalism encourage environmental sustainability?

Competition encourages businesses to reduce production costs, conserve materials, improve efficiency, and develop new technologies. These incentives can support environmental sustainability, particularly when combined with effective environmental regulations.

Does technology alone solve climate change?

No. Technology is essential, but it must be combined with effective policies, cleaner energy systems, investment, and public participation. Innovation creates solutions, while institutions and incentives help society adopt them.