Countries in a third group, including but not limited to Brazil, India, Italy, and Malaysia, are in a relatively weaker starting position, but they exhibit comparative strengths in specific areas on which they may be able to build. and emerging market companies including Tata, Infosys, and Tech Mahindra—are adopting broad reskilling initiatives, but a much larger societal push is needed to revamp education to make it relevant for the workplace of tomorrow, as well as to provide midcareer workers with new skills. We use cookies essential for this site to function well. Our research suggests that productivity could grow by at least 2 percent annually over the next ten years, with 60 percent coming from digital opportunities. The world’s 58 largest economic-value-creating companies account for 6 percent of all economic profit. Earning customer loyalty in a new age. Yet AI is not a silver bullet. High-wage jobs, especially for high-skill medical and tech or other professionals, will grow significantly. 4. These companies play a growing role on the global stage: while they accounted for only about 25 percent of the total revenue and net income of all large public companies in 2016, they contributed about 40 percent of the revenue growth and net-income growth from 2005 to 2016. Exhibit 1. While cross-border flows of goods and finance have lost momentum, data flows are helping drive global GDP. Etusivu » McKinsey Global Institute Industry Digitization Index 2015. McKinsey & Company, Global Institute Industry Digitization Index, 2015. Companies from China, India, Japan, and South Korea have made the biggest gains and now account for 22 percent of the total, up from 7 percent. Research by the McKinsey Global Institute indicates that digital transformation can result in productivity gains of 14 to 15 percent and cost reductions of 4 to 6 percent. 68–73, hbr.org. As China digitizes, industries will experience huge shifts in revenue and profit pools across the value chain. 2. As a phenomenon, however, globalization has not gone into reverse; rather, it has shifted gears to become more data driven and more focused on south–south flows. We estimate that they will generate 51 percent of urban consumption growth in developed countries, or $4.4 trillion, in the period to 2030. Businesses have been harnessing advanced analytics and the Internet of Things to transform their operations, and those in the forefront reap the benefits: companies that are digital leaders in their sectors have faster revenue growth and higher productivity than their less-digitized peers do. Etusivu » McKinsey Global Institute Industry Digitization Index 2015. Three factors suggest that there is huge upside for digital in China: The impact of digital China on the global economy has been increasing. “Global 500,” Fortune 500, 2017, fortune.com. According to a recent McKinsey Global Institute report, AI and automation will replace 375 million jobs by 2030. For now, however, only about 20 percent of companies say they have embedded AI in several parts of the business. November 10, 2017. 0 0 . Productivity growth averaged just 0.5 percent in 2010 to 2014, down from 2.4 percent a decade earlier. Digitization of work . Anu Madgavkar and Jonathan Woetzel, “Opinion: The critical role of outperforming emerging economies in poverty reduction,” Devex, October 11, 2018, devex.com. Rakennusalan konsulttitoimisto lähti ohjelmistoalalle 06/12/2018. The Industry Digitalisation Index (IDI), tracks businesses’ digitalisation progress across sectors, and spans four separate functions of digitalisation in the processes of trade and general business activities. The current value of China’s e-commerce transactions is estimated to be larger than in France, Germany, Japan, the United Kingdom, and the United States combined. In 2016, the value of mobile payments related to individuals’ consumption was $790 billion, 11 times that of the United States. McKinsey Quarterly. Under the leadership of Marvin Bower, McKinsey expanded into Europe during the 1940s and 1950s.In the 1960s, McKinsey's Fred Gluck—along with … Recent research from the McKinsey Global Institute ... Our research included a new Industry Digitization Index, the first major attempt to measure digital progress and adoption in each sector. 1. According to the McKinsey Global Institute’s Digitization Index1, ag is the least digitized major industry. We developed scenarios for the impact of automation on the workforce based on the pace and extent of adoption. One in three of the world’s 262 unicorns is Chinese, commanding 43 percent of the global value of these companies (Exhibit 1). Overall, digitization of industries in China still lags behind that of the United States by a considerable margin, but that gap is narrowing rapidly. Labor-productivity growth is near historic lows in the United States and much of Western Europe, despite a job-rich recovery after the global financial crisis. What will it mean for your company’s strategic agenda? McKinsey Global Institute, Tackling Europe’s gap in digital and AI, February 2019 Discussion paper McKinsey Global Institute, Applying artificial intelligence for social good , … Più 13% nei prossimi dieci anni grazie all'intelligenza artificiale. Massimo Giordano, managing partner per il Mediterraneo di McKinsey: investire su giovani e sostenibilità. However, these essential assets are increasingly vulnerable to the impacts of climate change—extreme temperatures, rising sea level, droughts, and hurricanes—which have profound humanitarian and economic impact. Underlying their performance are pro-growth policy agendas based on productivity, income, and demand—and often fueled by strong competitive dynamics. This has helped fuel growing political and social tensions, which have been manifested in various ways, including the rise of antiestablishment parties promising to break the mold in some countries, Britain’s 2016 vote to leave the European Union, and recent protests by yellow-vest-wearing gilets jaunes in France. and by several measures, they are already more innovative, nimble, and competitive than Western rivals. McKinsey Global Institute, December 2017. SOURCE: EU KLEMS (2016 release); BLS Multifactor Productivity database (2016 release); McKinsey Global Institute analysis McKinsey & Company 8 1 A sector is classified as "jumping" in year Y if its compound annual growth rate of productivity for years Y-3 through Y is at least 3 percentage points higher than it was for 1995–2014 as a whole. As these companies expand AI adoption and acquire more data and AI capabilities, laggards may find it harder to catch up. Why construction is stuck in the analog era. We analyzed nearly 6,000 of the world’s largest public and private companies with annual revenues of at least $1 billion; together, they make up 65 percent of global corporate pretax earnings. Increasing levels of economic activity at a global scale are having impact, both positive and negative, on the environment. hereLearn more about cookies, Opens in new An explosion in algorithmic capabilities, computing capacity, and data is enabling beyond-human machine competencies and a new generation of system-level innovation, such as the driverless car. This briefing note for the 2019 World Economic Forum in Davos draws on recent research by the McKinsey Global Institute (MGI). Among emerging economies, our research has identified 18 high-growth “outperformers” that have achieved powerful and sustained long-term growth—and lifted more than one billion people out of extreme poverty since 1990. 2. Part 2 introduces the MGI Industry Digitization Index for China, which reveals large variations among sectors in terms of their digitization. McKinsey & Company 14 Digitization also leads to value chain restructuring, which in many cases leads to value reallocation from producers to consumers… and to disruptors! In addition to restructuring value chains, adoption of digital technologies by businesses can boost sector productivity and generate impact equivalent to between 3 and 14 percent of the industry revenue pool. This suggests that the growth in demand for work, barring extreme scenarios, would more than offset the number of jobs lost to automation. Smaller, globally connected economies, such as Belgium, Singapore, South Korea, and Sweden, also score highly on their ability to foster productive environments where novel business models thrive. We see four key transitions from automation and AI adoption. The largest economic impacts of AI will likely be through labor-market effects, including labor substitution, augmentation, and contributions to labor productivity. Finally, automation will likely put pressure on average wages in advanced economies. More than 120 of these companies have joined the Fortune Global 500 list since 2000, Our mission is to help leaders in multiple sectors develop a deeper understanding of the global economy. The most digital companies see outsized growth in productivity and profit margins. Three of China’s Internet giants—Baidu, Alibaba, and Tencent, or BAT—are building a rich digital ecosystem now growing beyond them. Workers will need to acquire new skills and be more adaptable as they work ever more closely with evolving machines. Disruptive technologies, product innovation, and digitization will transform the US building products industry. 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