In the 90's there was a vision for what business called the "paperless office." The advent and adoption of computers, email, cheap printers, database recordkeeping, etc. was supposed to drive office paper usage into the dustbin of history. What did we actually experience? US office paper consumption rose 14.7% between 1995 and 2000. Despite the digital tool kit, people in the office environment printed more drafts, emails, and files than ever before.
This effect, or some would call it a paradox, has a name...Jevons Paradox. What made this topic the focus of my next column was simply the fact that I have heard reference to Jevons Paradox several times over the course of the last month or two. After repeatedly hearing the phrase on podcasts, blogs, interviews, and in comment sections, I had to investigate what it meant and why was it being mentioned so often in today's day and age.
Jevons Paradox is a counterintuitive economic principle first described by British economist William Stanley Jevons in his 1865 book The Coal Question. It states that technological improvements increasing the efficiency with which a resource is used often leads to a rise - rather than a fall - in the total consumption of that resource. EFFICIENCY makes the resource cheaper or more effective per unit of output, which lowers its effective price. If demand is price-elastic (the standard economic supply/demand curve of something being cheaper driving more demand) it sparks a wider adoption, new applications, and overall expansion of use. This "rebound" in demand can fully offset - or even exceed - the per-unit savings the technical advancement drove.
The test case Jevons used to develop his paradox theory was the use of coal during the industrial revolution. More efficient steam engines being developed reduced the coal needed per unit of work. Yet coal consumption tripled by 1900. Steam engines became affordable enough to power far more factories, ships, trains, and whole industries. The paradox applies whenever efficiency lowers barriers without hard limits on total supply or demand.
The recent, repeated use of the phrase Jevons Paradox was coming into focus for me. I think it represents the icing on the cake of what the adoption of artificial intelligence and AI agents will mean for our work lives. Just like what the steam engine did for manual work, the work expanded ten fold, then a hundred fold, then a thousand fold. When AI and AI agents take over much of the tasks we get paid to do now, your personal output through the efficiency gains will lead to extreme growth of our industries and demand from the marketplace. Optimism is not wrong here. Pessimism engulfs us as we only think about the transition and adoption period.
Another use-case we can look at that is near and dear to our hearts in the paper industry - the printing press. When information had to be hand-written for distribution, time to produce a piece and the distribution reach was very limited. Along comes Mr. Guttenberg with his idea of moveable typeset and a printing press. All of a sudden, the time to produce a written pamphlet dropped by ~98% and duplication was a breeze. Your thoughts, observations, stories, news, analysis or whatever was put on paper that could be produced in large quantities and reach ever-expanding markets. Our whole world flourished with knowledge distribution that became cheaper. Ironically, Guttenberg died poor because he did not understand how to monetize his invention. He just tried selling more books in his local vicinity and to a population incapable of reading.
Computational capacity for AI will only get cheaper as systems scale and optimize. The common worker will be able to access this AI capability and deploy agents ($20/month) that act like employees doing boring, repetitive tasks. If you're good working with your hands and display all the attributes of craftsmanship, but don't have the skills to run a business - you can now have AI agents track hours, code costs, build estimates, project cash flow, invoice customers, monitor dashboards, route calls, etc.
There are going to be bumps in the road, severe employment disruption, and many more unintended consequences as this technical adoption plays out. Plan on being uncomfortable if you're young in this industry. However, as Jevons Paradox plays out and drives demand higher and higher - young people need to think about how they can play a role in that glorious future. What is GDP growth, manufacturing growth, consumption growth driven by AI adoption going to do to the demand for packaging? What new applications of paper and other cellulose-based forms are going to be invented? How will we be able to replace non-biodegradable materials with organic substitutes like pulp and paper? We grow our resource and harvest responsibly. That is a feature of what we make, not a bug to be squashed.
It truly is a glorious time to be alive. Watching all of this societal evolution has been fascinating. Opportunity is everywhere if you have the ability to think for yourself and learn new tools. What better playground than the massive, coordinated, continuous process of pulp and paper making? Maybe AI will come to some major insights and conclusions about how our process is managed. Maybe we'll find a way to remove even more costs through efficiency or yield improvement that will drive our market demand higher. Will you be ready to earn some money for your own future by participating in this macro-scale effect?
Build your knowledge. Build your network. Build your toolbox. The only predictable future is the one you build yourself. If you understand Jevons Paradox - we could be in store for an exciting future. Too many people get stuck or replaced if they can't evolve with the times. A "paperless office" eventually digitized enough to lower demand for forms and copy grades, but a lot of people made some money in the period in between.
Steve Sena (stevesena@me.com) is a Cincinnati native. He obtained degrees in Paper Science & Engineering from Miami University in Oxford, OH and an MBA concentrating in Economics from Xavier University. He's worked for a broad array of leading producers, suppliers, and converters of pulp and paper grades.
