Five things you need to know about dematerialization

Replacing physical products and tools with the latest IT and software is a trend that could gather momentum in the coming years.

1. What is dematerialization?
   Dematerialization is a term coined by Bill Joy, Sun Microsystems’ co-founder, to describe the way software and IT disrupt products, services and industries by removing the need for all sorts of physical things.

   Perhaps the most striking example is the modern smartphone, which puts a PC, camera, alarm clock, calculator, flashlight, games system, library and virtual marketplace in your pocket.

2. Where is the trend going from here?
   Emerging examples include the move toward collaborative consumption, where groups of people use network technology to share cars and consumer goods. The advent of 3D product printing to make goods and spare parts could transform supply-chain efficiencies.

   New applications in medicine and new opportunities for digital education could challenge the established health and education systems.

3. What are the implications?
   Dematerialization is one of the key trends threatening to overthrow many “legacy” industries while driving an accelerating global improvement in wealth and well-being over the next two to three decades, argue Peter Diamandis and Steven Kotler in their book Abundance.
4. What do the critics say?
   Critics argue that some things cannot be dematerialized, such as housing or caring for children and the elderly. They also believe that we will always need hard infrastructure, such as roads, bridges, power stations and power lines, water and wastewater systems.
5. Is it just a fad?
   It is already a well-established trend and the onward exponential march of certain technologies may accelerate it. Diamandis and Kotler argue that concerns about resources running out are misplaced. Worries about scarcity, they claim, are more often an issue of availability. They point out, for example, that the universal need for clean potable water and affordable energy can be met.

   The world is covered in water and bathed in sunlight, but the 97% salt content of the former and the dissipated nature of the latter can be, and is being, addressed through technology.The hard infrastructure to supply such services may not always be essential, the authors add. Distributed power generation and the delivery of goods by small unmanned drones (which are 99% cheaper than they were a decade ago) are just two emerging solutions that help remote and poor regions to develop with less physical infrastructure.

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