Innovation calls for resources

Illustration | Bosch Rexroth AG
Marginal Column

Above: The demand for Gallium four years ago and twenty years from now, in comparison with the current extraction rate.

What raw materials will we be needing in the year 2030? And how much? A study examines the interplay between technical change, demand for raw materials and natural resource supply.


The rare earths are a hot topic right now – in high-tech manufacturing, on the world’s commodities markets and in media reports. The fact is that these seventeen elements – the so-called rare earth metals – are by no means as rare as their name suggests (see box). But without them the modern world would come to a standstill. Yttrium, samarium, neodymium and the like are key elements in everyday products and for tomorrow’s innovations. Acting something like a stand-in for other critical natural resources, public discussion is focusing on the alleged shortage of rare earths. And what we’re talking about here is nothing less than the future of our cutting-edge technologies.

Going beyond fleeting headlines and adopting a broader point of view, a study by the Fraunhofer Institute for Systems and Innovation Research (ISI) examined industrial use of new technologies in the future and the resultant impact on global demand for resources. Another investigation vector was to establish which resources are particularly critical for certain innovations. Drawing from about one hundred future technologies, thirty-two were selected and analyzed. Their relationships to twenty-two natural resources were then determined.

According to the study’s authors, tremors in the commodities markets are not caused by depleted supplies, as is often assumed. Instead, turbulences arise from imbalances between supply and demand. Up-and-coming markets like China are stimulating demand to an unexpected extent. The effect of technical innovations on global demand is apparently not always recognized. This can lead to misappraisals of the situation.

Anyone who wants to do business efficiently is highly reliant on in-depth information about the interplay between technical change and the ensuing demand for raw materials. An indicator of the demand triggered by technical change is useful. The study uses as its indicator the ratio between future demand for a resource and current worldwide production. This figure shows which multiple of today’s total production in a particular resource will be required in 2030. For gallium this indicator reaches a value of 6 while neodymium reaches 3.8.

Illustration | Bosch Rexroth AG

Source: Rohstoffe für Zukunftstechnologien, Studie des Fraunhofer Instituts für System- und Innovationsforschung (ISI). Available for download at


This means that demand for these two resources – due solely to foreseeable technical advances – will be 6 and 3.8 times as great as today’s entire production output. And these figures do not yet include the demand for natural resources emanating from effects aside from the new technologies analyzed here. The conclusion drawn by the authors is that more efficient utilization of raw materials and redoubling recycling activity will be central tasks for the future.

Rarely rare

Rare earths are in fact not earths and only seldom are they actually rare. The metals classified as rare earths were first discovered toward the end of the seventeenth century in rare minerals and isolated from these in the form of oxides (at that time referred to as “earths”). Many of the metals among the rare earths are found relatively often in the earth’s crust. Neodymium, for instance, is more common than lead. But many known deposits have not been – or are no longer – mined for reasons of costs and due to environmental considerations.

The fact that at present about ninety-five percent of the world’s production comes from China is due to the favorable extraction conditions prevailing there to date. The United States Geological Survey estimates that China has about onethird of the world’s reserves, the U.S.A. about thirteen percent (1). Responding to delivery bottlenecks, countries including Australia, Canada, Kazakhstan and Vietnam are planning to develop their own resources. Small deposits could even be mined in Germany in the future. In the Saxon town of Storkwitz a deposit containing an estimated 40,000 tons of rare earth metals was discovered when, in the mid-1970s, East Germany was exploring for uranium.

(1) Source: Frankfurter Allgemeine Zeitung, October 31, 2010