Improvements in energy efficiency will enable businesses partially to buffer themselves from the impacts of peak oil, but the direct and indirect effects of rising energy prices will result in economic disruptions and dislocations, adversely affecting businesses and employment. <!--[endif]-->
To the extent that energy prices rise while the aggregate size of the population (i.e., the supply of labor) increases, the cost of labor relative to the cost of energy will fall. This shift will provide new opportunities for skilled and manual labor as well as for efficient alternatives to existing technologies, materials, processes and services.
In general, rising production costs will lead to higher prices for goods and services, and both consumer purchasing power and consumption are likely to decline, as they did in the 1970s. In many industries, production may also take place on a smaller scale in decentralized locations, thereby sacrificing current efficiencies of scale that are largely the result of access to inexpensive fossil fuels.
The combination of increased production costs and decreased consumer purchasing power likely will increase the number of businesses that fail each year. To the extent that increased unemployment accompanies business closures, more people may try to create their own businesses. On a larger scale, this increase in the number of business start-ups and failures per year will increase the risks and uncertainties about economic downturns and what goods and services are provided, how and by whom.