Demand therefore, standing alone, creates nothing.  You can stand out on a street corner and "demand" all day long, and it will not assure you that your demands for consumable items will be met.

Rather than "consumer demand", the allocation cycle begins with an act of investment - investment that may occur whether or not there is an active state of demand for the particular item being invested in.

For example, a businessman may use his mental faculties to observe his fellow men, and may identify a problem that exists that might be solved with a product or service that he proposes to produce or provide.

Only when this businessman anticipates that there will be a profit in this endeavor - in whatever manner or form he defines profit to be - will he take the first step forward toward toward production, by investing his time, money, and energy into the tools and methods that will create the production to satisfy the demand he imagines will exist for his product or service.

There are a great many things that are produced for which there was no demand until after  the item had been developed or produced.  There are also many readily-identifiable demands that exist for which production may be initated to fulfill.

In either case however, an investment will only be made if the businessman or industrialist can reasonably anticipate or predict that there will be a consumer demand for his service or product, in a great enough volume and at a high enough price as to ensure a profit after the costs of development and production are paid.

As far as starting an allocation cycle is concerned, it is the willingness to invest not the demand of the consumer, that gets the productive process rolling.  Without the investment, there will be no production, and any actual or anticipated demand will go unsatisfied.

So what are the factors that will cause a person to invest?  Why do some individuals choose to set aside a portion of their money for investment purposes, while other individuals simply use their money for consumptive purposes?