Reduction in demand for primary commodities due to technological change

Production of synthetic substitutes for primary commodities
Competition between synthetics and primary commodities

Nature

The demand for many primary commodities, particularly those produced by developing countries, has been seriously eroded by the evolution of man-made substitutes. Half the world requirement of rubber, for example, is now met by synthetic products. Pulp-based rayon and acetate, and petroleum-based noncellulosic fibres are rapidly increasing their share of the total fibre market, thus restricting the rate at which cotton and wool sales can be expanded. In almost every field technical advances are resulting in economies in use. Leather produced from animal hides is replaced by plastic materials produced from natural gas; aluminium is substituted for wood; the products of the chemical industry for the output of the farm and the forest. The market share of natural products is falling steadily, which has the side effect of raising world price-elasticity of demand to at or near the level of synthetic prices.

Background

The global significance of declining demand for primary commodities due to technological change emerged in the late 20th century, as synthetic alternatives and efficiency innovations reduced reliance on traditional raw materials. This trend became particularly evident in sectors such as textiles, energy, and agriculture, prompting international concern over economic vulnerability in commodity-dependent regions. Subsequent analyses highlighted the complex interplay between technological progress, shifting consumption patterns, and the destabilization of export revenues for many developing economies.

Incidence

The reduction in demand for primary commodities due to technological change has affected economies worldwide, particularly those heavily reliant on exports of raw materials such as coal, rubber, and certain metals. Advances in synthetic alternatives, renewable energy, and recycling technologies have led to significant declines in traditional commodity markets, impacting employment, government revenues, and economic stability in multiple regions.
In 2023, Indonesia experienced a sharp decline in natural rubber exports as global tire manufacturers increasingly adopted synthetic rubber and more efficient production methods. This shift resulted in lower prices and reduced income for smallholder farmers, highlighting the vulnerability of commodity-dependent communities.

Claim

The reduction in demand for primary commodities due to technological change is a critical problem with far-reaching consequences. It threatens the livelihoods of millions in developing economies, destabilizes global markets, and accelerates inequality. Ignoring this issue risks deepening poverty and social unrest. We must urgently address the economic and social fallout of technological disruption in commodity-dependent regions, or we will face a future marked by instability and widespread hardship.

Counter-claim

The so-called "reduction in demand for primary commodities due to technological change" is not an important problem at all. Technological progress drives efficiency, innovation, and economic growth, naturally shifting demand patterns. Societies adapt, new industries emerge, and resources are reallocated. Worrying about declining demand for outdated commodities distracts from real challenges—embracing change is essential for progress, not something to fear or resist. This issue is simply not worth our concern.