Sustainability & Resource Productivity

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Resource Revolution: How to Capture the Biggest Business Opportunity in a Century

New Harvest, 2014  |  Stefan Heck, Matt Rogers, Paul Carroll (Contributor)

ValuationThe prophets of doom are wrong. They believe the rapid rise over the next two decades of a new 2.5-billion-person urban middle class—and the unprecedented demand this growth will generate for oil, gas, steel, land, food, water, cement, clean air, and other commodities—must inevitably spur a global economic and environmental crisis. Our new book, Resource Revolution takes that challenge seriously—but comes to exactly the opposite conclusion.

Instead, we believe, the chance to meet soaring demand in a sustainable way by transforming how companies and societies prosper represents nothing less than the biggest business opportunity in one hundred years. The combination of information technology, nanoscale materials, and biotech with traditional industrial technology can unleash a step-change in resource productivity and generate enormous new profit pools. However, capturing these business opportunities—and avoiding the disruption they bring—will require an entirely new approach to management.

Look at the car industry, which is more than a century old and which is generally seen as mature—but which is wildly inefficient in its use of resources. The average car is in use only 4 percent of the time. Less than 1 percent of the energy used in a car actually goes to transporting the people in it. Operating at maximum efficiency, a highway is only 5 percent covered by cars. Yet cars can become much more energy-efficient by, for instance, switching to electric motors. Idle time can be slashed by sharing cars or even through driverless technologies. Highways can be packed much more densely with cars when they have autopilots like airplanes and ships.

Similar disruptions are roiling businesses from oil and gas to power and water to agriculture, transportation, buildings, and even healthcare. Resource Revolution explores how companies from GE to Cree are meeting this 21st century productivity imperative and offers practical steps to guide managers in any industry.



report | McKinsey Global Institute

Resource revolution: Meeting the world’s energy, materials, food, and water needs

November 2011—Resource prices are rising and becoming more volatile. Without a resource revolution, we all face the prospect of damage to global growth, welfare, and the environment.more

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article | McKinsey QuarterlyResource-Rev_1536x1536_Thumbnail

Are you ready for the resource revolution?

March 2014—Meeting increasing global demand requires dramatically improving resource productivity. Yet technological advances mean companies have an extraordinary opportunity not only to meet that challenge but to spark the next industrial revolution as well.more