This idea that materials undergo life cycles and substitution was furthered in the development of the new concept of transmaterialization; see Labys (1986), Labys and Waddell (1989), Waddell and Labys (1988) and Hurdelbrink (1991). Cyclical changes are in contrast to structural changes that imply growing obsolescence but not awareness of product life cycles. Transmaterialization describes the characteristic behavior of material markets over time by focusing on a series of natural replacement cycles in industrial development. As needs of economic society change, industries continually replace old materials with newer, technologically more advanced materials. This is part of the scientific process and, therefore, should not only be observable, but also be predictable from the point of view of profitability of individual mineral firms. Many developed countries have thus undergone an industrial transformation in which materials basic to 20th-century society are being replaced by materials with ramifications to the 21st century.
The origins of transmaterialization can be found in several aspects of the growth literature. Schumpeter (1927) developed a theory supporting the view that growth comes in spurts and appears as cyclical upswings. According to Schumpeter, progress is due to economically induced innovations, their gradual adoption and successful entrepreneurship. A more familiar notion of growth and one which underlies the Schumpeterian idea of progress specifies growth as following an S-shaped curve. Prescott (1922), Kuznets (1930) and Burns (1934) evaluated this growth theory for a sample of individual commodities and industries. Later Dean (1950) expanded this theory into the 'product life cycle' theory. The application of these theories to a number of different variables and different industries was later confirmed by Nakicenovic (1990).
The application of the life cycle model to transmaterialization requires five stages. The first model stage is the initial introduction of a new commodity. The performance of the material is not yet proven and sales are therefore sluggish. The consumption rates (measured as quantity/GDP) are typically low, along with vast potential markets. Representative of this stage are advanced ceramics, such as the silicon carbide and silicon nitride-based ceramics. These newer ceramics have been developed in order to fulfill a particular need for higher resistance to abrasion and to wear, high strength at high temperatures, superior mechanical properties, greater chemical resistivity and good electrical insulation characteristics.
The second, or growth, stage (sometimes referred to as the youthful stage) follows the discovery of a commodity or a major application. During this stage, consumption of the commodity increases rapidly as its properties are appreciated and promoted through research and dissemination of information. Consumption generally increases at a rate much faster than the economy as a whole, and this is reflected in a rise in the intensity of use index. Examples of youthful materials include gallium and the platinum group metals. During the third or mature stage, the growth in IOU begins to decline. The material has been accepted into industrial processes and the rapid growth of the youthful stage levels off. Aluminum represents a material currently in the mature stage.
According to Humphreys (1982), during the fourth or saturation stage, the IOU peaks and begins to decline, although the consumption, as measured in physical quantities, may still be increasing. Molybdenum, manganese and cobalt are currently in their saturation stage. The fifth or declining stage witnesses a significant decline in IOU of a material. During this stage, even total consumption declines, mainly because of newer materials replacement. Examples of materials in this last stage include tin, asbestos and cadmium.
Expanding upon the work of Humphreys and the life cycle theorists, Waddell and Labys (1988) showed that the recognition and the empirical determination of these cycles can make a strong case for transmaterialization. The hypothesis that growth and development occur in waves or cycles as defined in the product life cycle theory can be applied to materials markets. We would thus expect to see regular product life cycles for a number of minerals over extended periods of time. The timing and phases of these cycles obviously will vary with the nature of the products or minerals selected.
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