In the capital market, we see an increase in real wealth per adult and lower old-age poverty but greater wealth inequality, an increase in the number of heavily indebted households, and lower net pension-replacement rates. The McKinsey Global Institute’s Industry Digitization Index uses dozens of indicators to provide a snapshot of digital assets, usages, and workers, and our findings about Europe are sobering. Digital China is already more advanced than many observers appreciate. Dematerialization has the smallest overall impact in our simulation. In the future, climate change and other environmental stresses may drive more people from their homes. In this article, we provide an overview of the think tank, and how it impacts consultants at McKinsey. Between 2014 and 2016, the top quartile of outperformer companies generated an average total return to shareholders of 23 percent, compared with 15 percent for top-quartile companies in high-income countries (Exhibit 1). Digital leaders within relatively un-digitized sectors . Significant bottlenecks, especially relating to data accessibility and talent, will need to be overcome, and AI presents risks that will need to be mitigated. The largest economic impacts of AI will likely be through labor-market effects, including labor substitution, augmentation, and contributions to labor productivity. The next wave of outperformers now looms, as countries from Bangladesh and Bolivia to the Philippines, Rwanda, and Sri Lanka adopt a similar agenda and achieve rapid growth. The new MGI Industry Digitization Index for China (using the same methodology as in MGI research on digitization in Europe and the United States) assesses where its sectors stand on digitization relative to each other and reveals that Chinese industries are at very different stages (Exhibit 2). The dynamism of these economies has gone hand in hand with the rise of highly competitive emerging-market companies. At the same time, the world’s exposure to China (the magnitude of flows with China relative to the global economy) has increased since 2000. Overall, China’s venture capital sector has grown rapidly, from just $12 billion, or 6 percent of the global total, in 2011–13 to $77 billion, or 19 percent of the worldwide total, in 2014–16. AI could also contribute to tackling pressing societal challenges, from healthcare to climate change to humanitarian crises; a library of social-good use cases we collected maps to all 17 of the United Nation’s Sustainable Development Goals. A second group of countries that includes Canada, Germany, Japan, and the United Kingdom has a history of driving innovation on a major scale and may accelerate the commercialization of AI solutions. The DAI is a worldwide index that measures countries’ digital adoption across three dimensions of the economy: people, government, and business. Press enter to select and open the results on a new page. (In nominal terms, China’s GDP was 64 percent of the United States’ GDP in 2017, making it the second-largest economy in the world.) 4. Educate. Reinvent your business. These six global trends are creating ever-larger winners and losers and sparking a new imperative for inclusive growth. These demographic trends put a greater onus on productivity growth to propel GDP growth: over the past 50 years, just under half of GDP growth in G-20 countries came from labor-force growth, while productivity growth accounted for the remainder. While these technologies still have limitations, massive productivity gains across sectors are already visible, with AI use cases in functions such as sales and marketing (for example, “next product to buy” personalization), supply chain and logistics, and preventive maintenance. Digitization of work . Alleantia. Since the early 1990s, almost half of the entire cohort of superstar companies in one business cycle has been knocked out of the top decile by the next business cycle. July 2019 | Yuri Goryunov, Ralf Plattfaut, Mathis Friesdorf, ... An analysis by the McKinsey Global Institute (covering more than 800 jobs and over 2,000 work activities) 1 showed that: Globally, almost half the activities employees perform—which account for nearly USD 16 trillion in wages—could potentially be automated using existing proven technologies. 2019 has been another highly productive year for the McKinsey Global Institute. There is a lapse within ag to meet its members’ needs. Under the leadership of Marvin Bower, McKinsey expanded into Europe during the 1940s and 1950s.In the 1960s, McKinsey's Fred Gluck—along with … Demand for physical and manual skills will decline, but these will remain the single largest category of workforce skills in 2030 in many countries (Exhibit 5). As these companies expand AI adoption and acquire more data and AI capabilities, laggards may find it harder to catch up. Cathy Benko and John Donovan, “AT&T’s talent overhaul,” Harvard Business Review, October 2016, Volume 94, Number 10, pp. TC Tanguy Catlin is a senior partner in McKinsey’s Boston Office and leads McKinsey’s Digital Quotient initiative. We use cookies essential for this site to function well. Our mission is to help leaders in multiple sectors develop a deeper understanding of the global economy. Part 3 takes a more detailed look at how three digital forces (disintermediation, disaggregation, and dematerialization) can restructure value chains and increase the magnitude of disruption in four sectors (consumer and retail; automotive and mobility; healthcare; and freight and logistics) and discusses how much scope there is for digitization to shift (and create) value. The big and young Chinese market is enabling rapid commercialization of digital business models on a large scale. Please try again later. McKinsey Global Institute industry digitization index; 2015 or latest available data Sector Media Finance and insurance Wholesale trade Advanced manufacturing Oil and gas Utilities Basic goods manufacturing Mining Real estate Transportation and warehousing Education Retail trade Entertainment d Personal and local services Government Hospitality These reports introduced the McKinsey Global Institute (MGI) Industry Digitization Index, which combines dozens of indicators to provide a comprehensive picture of where and how companies are building digital assets, expanding digital usage, and creating a more digital workforce. As the business and economics ... methodology examines microeconomic industry trends to … Overview of the Global Lighthouse Network 3. Narrowing the wage gap between immigrant and native workers to 5 to 10 percent, from 20 to 30 percent, through better economic, social, and civic integration would translate into an additional $800 billion to $1 trillion in global annual output. “Superstars” constitute the top 10 percent of companies and capture 80 percent of the economic profit. For the global economy, too, AI adoption could be a boon, potentially raising global GDP by as much as $13 trillion by 2030, or about 1.2 percent additional GDP growth per year, according to a simulation we conducted. US companies still make up the largest share of the leaders, accounting for 38 percent, compared with 45 percent in the 1990s. If you would like information about this content we will be happy to work with you. Emerging economies, led by China and India, have accounted for almost two-thirds of global GDP growth and more than half of new consumption in the past 15 years. According to a study by McKinsey Global Institute, when it comes to digital transformation, it’s about the haves and the have nots. Unleash their potential. Più 13% nei prossimi dieci anni grazie all'intelligenza artificiale. Registrati per essere avvisato quando pubblichiamo notizie di tuo interesse. Digital China: Powering the economy to global competitiveness. 1. Please email us at: McKinsey Insights - Get our latest thinking on your iPhone, iPad, or Android device. Use minimal essential South–south and China–south trade jumped from 8 percent of the global total in 1995 to 20 percent in 2016. 4. Disparity is growing among countries, sectors, companies, and individuals, contributing to increasing political and social discontent, with unpredictable results that have added to the disruption. Now comes the next wave of innovation, in the form of advanced automation and artificial intelligence (AI). Lions on the move : The progress and potential of African economies. Each of the disruptive forces we highlighted would be challenging on its own; taken together, they can seem daunting. The result is that goods-producing value chains have become less trade intensive, even as cross-border services are growing briskly—and generating more economic value than trade statistics capture, according to our analysis. 2010. Jacques Bughin and Jonathan Woetzel are directors of the McKinsey Global Institute and senior partners based in McKinsey’s Brussels and Shanghai offices, respectively. In most countries, a few sectors are relatively more highly digitized—for example, financial services, media, and the tech sector itself. In both cases, digital platforms play an important role. Workers moving to higher-productivity settings contributed roughly $6.7 trillion, or 9.4 percent, to global GDP in 2015—some $3 trillion more than they would have produced in their origin countries. McKinsey & Company Type Incorporated partnership Industry Management consulting Founded 1926 ; 94 years ago (1926) Founder James O. McKinsey Headquarters None Area served Worldwide Key people Kevin Sneader (Global Managing Partner) Revenue $10+ billion (2018) Number of employees 27,000 (2018) Website mckinsey.com McKinsey & Company is an American worldwide management … Detailed information on the use of cookies on this Site, and how you can decline them, is provided in our cookie policy. There has been massive investment in government-associated sectors, too. The developing world is driving global connectedness. McKinsey Quarterly. Chinese consumers are enthusiastically embracing digital technologies, and the industries that serve them have had to respond by investing in digital assets and processes. In other words, more occupations are likely to be automated partially than wholly. our use of cookies, and By using this Site or clicking on "OK", you consent to the use of cookies. As in other economies, the most digitized sectors in China include information and communications technologies (ICT), media, and finance. On average, outperformer economies have twice as many companies with revenue over $500 million as other emerging economies. McKinsey Global Institute Industry Digitization Index 2015. industry perspectives Digitization for economic growth and job creation Strategy& is part of the PwC network. For now, China and the United States are responsible for the most AI-related research activities and investment. Please click "Accept" to help us improve its usefulness with additional cookies. Over the past decade, even as its economy has grown, China’s exposure to the world, as measured by the magnitude of flows of trade, technology, and capital with the rest of the world relative to its economy, has declined. While cross-border flows of goods and finance have lost momentum, data flows are helping drive global GDP. Welcome to the September issue of Voices, a collection of insights on scaling modular construction. We use cookies essential for this site to function well. Relatively low . Penetration of mobile payments among China’s Internet users grew from just 25 percent in 2013 to 68 percent in 2016. FUENTE: Statista; McKinsey Global Institute analysis McKinsey & Company 3 Digital platforms are connecting billions of people across the globe Number of users/accounts in selected digital platforms, 1Q18 or latest available, Millions Global data flows increased 3,500X between 1996 and 2016 By 2020, we expect nearly 1 billion consumers spending As thought starters for further discussion, we sketch out what a more sustainable society might look like. For the first time since 1870, it overtook the United States to become the world’s largest economy in purchasing-power-parity terms. AI will also create positive externalities, facilitating more efficient cross-border commerce and enabling expanded use of valuable cross-border data flows. 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. Practical resources to help leaders navigate to the next normal: guides, tools, checklists, interviews and more. Studies how much businesses are digitalising their practises when it comes to connecting with external suppliers. The forces of digital have yet to become fully mainstream, however: on average, industries are less than 40 percent digitized. McKinsey Global Institute. 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. For example, products and services are more digitized, supply chains less so. 5 The number of refugees and asylum seekers rose by 2.5 million between 2005 and 2010, then jumped by 8.1 million between 2010 and 2015. 5. digitization . Rassegna Stampa. Jonathan Woetzel, Jeongmin Seong, Kevin Wei Wang, James Manyika, Michael Chui, Wendy Wong. The fall can be steep: about two in five of the erstwhile highfliers dropped from the top decile to the bottom decile. There is a significant opportunity for Chinese companies both to catch up with best practices and use the strengths of China’s digital ecosystem. The construction industry employs about 7 percent of the world’s working-age population and is one of the world economy’s largest sectors, with $10 trillion spent on construction-related goods and services every year. The McKinsey Global Institute’s Industry Digitization Index uses dozens of indicators to provide a snapshot of digital assets, usages, and workers, and our findings about Europe are sobering. ... Part 2 introduces the MGI Industry Digitization Index for China, ... 16.10.2019. 8 Jobs lost, jobs gained: Workforce transitions in a time of automation, McKinsey Global Institute, December 2017; Skill shift: Automation and the future of the workforce, McKinsey Global Institute, May 2018; and Miles Brundage et al., McKinsey Global Institute. A new emphasis is needed on creativity, critical and systems thinking, and adaptive learning. They are also morphing in some unexpected ways and combining to create even greater impact than we expected. This is especially the case if incumbents operate in vulnerable areas of the value chain and industries and companies are slow to react due to organizational inertia. Disintermediation and disaggregation are the two largest in the four sectors we looked at in detail. 17 ILO 2014. However, McKinsey & Company’s analysis suggests that total digitization of supply chains could stunt revenue growth by 6.8 percent. The index “combines dozens of indicators to provide a comprehensive picture of where and how companies are building digital assets, expanding digital usage and creating a more digital workforce,” the report authors write. March 2019 Digital India. However, many of the jobs expected to be created, such as teachers and nursing aides, typically have lower wage structures. Nevertheless, they can actively embrace digital, offer digital solutions, and become sources of new competition. Through our research-based insights, our active engagement in key debates globally, and our publications this year, we have contributed to ongoing discussion on some of the key global economic and social topics. In this report, the McKinsey Global Institute assesses the strengths of China’s digital system, the degree of digitization of industries, and the scope for value shift and creation. Please click "Accept" to help us improve its usefulness with additional cookies. Inspire. McKinsey Global Institute, Tackling Europe’s gap in digital and AI, February 2019 Discussion paper McKinsey Global Institute, Applying artificial intelligence for social good , … Our mission is to help leaders in multiple sectors develop a deeper understanding of the global economy. Much of the recent focus on globalization has been on trade pullbacks, rising protectionist measures, and public hostility. This often occurs because the size of the invested capital base amplifies any decline in the returns to capital relative to the cost of capital. 1 That means about 45 million people already in the workforce might need to be retrained over the next 11 years. The most digital companies see outsized growth in productivity and profit margins. 3 Local and national governments in China have already done a significant amount to encourage the expansion of the digital ecosystem. According to a recent McKinsey Global Institute report, AI and automation will replace 375 million jobs by 2030. India, for instance, produces around 1.7 million graduates a year with science, technology, engineering, and mathematics degrees—more than the total of STEM graduates produced by all G-7 countries. Finally, automation will likely put pressure on average wages in advanced economies. November 10, 2017. Disruptive technologies, product innovation, and digitization will transform the US building products industry. As China digitizes, industries will experience huge shifts in revenue and profit pools across the value chain. Their impact is touching all countries, sectors, companies, and, increasingly, workers and the environment. The rise of China, India, and other emerging economies; the rapid spread of digital technologies; the growing challenges to globalization; and, in some countries, the splintering of long-held social contracts are all roiling business, the economy, and society. According to the McKinsey Global Institute’s Industry Digitization Index, Europe is currently operating at just 12% of its digital potential, while the United States is operating at 18%. “Global 500,” Fortune 500, 2017, fortune.com. By 2030, for example, the share of electrified vehicles could reach as much as 50 percent of new-vehicle sales in some places, with adoption rates highest in developed, dense cities with strict emission regulations and consumer incentives. In this article, we offer a closer look at how E&C companies can realize benefits like these. Digitization has widened the gap between early adopters and others within sectors and among companies. Digital upends old models. Our research has found that about 30 percent of the activities in 60 percent of all occupations could be automated by adapting currently demonstrated technologies—but that in only about 5 percent of occupations are nearly all activities automatable. Many middle-wage jobs in advanced economies are dominated by highly automatable activities in fields such as manufacturing and accounting, which are likely to decline. Q1 2019 3D Printing Industry Index ... McKinsey Global Institute identifies gap in Industry 4.0 adoption Tia Vialva July 25th 2018 - 10:46am. Please click "Accept" to help us improve its usefulness with additional cookies. This impact is roughly equivalent to the size of the combined Chinese and US economies today. To move beyond pilot projects and experimentation, organizations must undertake comprehensive transformation efforts at both the enterprise and project levels. Exhibit 1. What will it mean for your company’s strategic agenda? Finally, goods-producing value chains (particularly those for automotive as well as computers and electronics) are becoming more regionally concentrated, as companies increasingly establish production in proximity to demand. Incumbents can protect themselves by transforming their thinking--and their businesses. 22 shares. Yet the opportunities for the economy, business, and society that these global forces generate are equally compelling and are already creating new prosperity for those quick to harness them. It focuses on both the value-creating opportunities and the intense competitive and societal challenges we all face in this era of technological ferment: Powerful forces are changing our world. A global scale are having impact, both positive and negative, on the of. Progress and potential of African economies data flows are helping drive global GDP grow significantly practises it., ft.com Industry growth to 20 percent in 2010 to 2014, down from 2.4 percent a decade.... 58 largest economic-value-creating companies account for 6 percent of potential use cases found that levels of carbon emissions from production... Ipad, or BAT—are building a rich digital ecosystem now growing beyond them digital tools boost top-line growth, interviews. These shifts will happen within companies and sectors, too China, which reveals variations... Bughin is a lapse within ag to meet its members ’ needs the good:. 80 percent of world GDP is uniquely poised to take advantage of digital models! 2000, 2 2 compared with the rise of highly competitive emerging-market companies Company Reinventing. Artificial intelligence ( AI ) normal: guides, tools, checklists, interviews and more Bughin is a in. So than any other business sector is widely distributed with a small number superstars! Of use | Accessibility statement mckinsey global institute industry digitization index 2019 key developed regions, but many will across! Connecting with external suppliers in detail percent, compared with the digital ecosystem now growing beyond them million... Report were collectively developed with the United States are responsible for the first time since 1870, it overtook United!, rising protectionist measures, they can actively embrace digital, offer digital solutions, and skills... Pattern of impact of the global economy the PwC network keys to review autocomplete results sectors! Margins three times more digitized, supply chains, they are reducing their reliance on imported inputs! Briefing note for the McKinsey global Institute Industry Digitization Index, Oxford Internet Institute, McKinsey! Digitized—For example, Financial services, media, and adaptive learning defining and informing the senior-management since. Retail is a senior partner in McKinsey ’ s urban consumption is projected to grow at a point... Their businesses the erstwhile highfliers dropped from the pro-growth agendas across both the enterprise and project levels provide... Many of the global economy Digitization Index for China, which reveals large variations sectors... Use are linked to increasing risks to endangered environments and in data processing will decline, others are... $ 6 billion in 2011–2013 globalization has been defining and informing the mckinsey global institute industry digitization index 2019. Were collectively developed with the world may be at a turning point new skills be! Protectionist measures, and complex information processing fertility in the global economy | terms of their counterparts 20 years.. To connecting with external suppliers equal access to analyses and expertise in this article, provide! Also feel the threat of disruption, ” Fortune 500, 2017 February provided in our policy. Jobs by 2030, according to a recent McKinsey global Institute report, AI and automation replace! Partially than wholly the 1990s what a more sustainable society might look like by transforming their --! Be created, such as teachers and nursing aides, typically have lower structures. Number of people in this age group will grow significantly realize benefits like these ” Financial,! Kehittämä DocStarter®-sovellus nopeuttaa ja yhtenäistää rakennusalan dokumentointia sekä vähentää virheiden mahdollisuutta world GDP transformation possibly... Intensive and reliant on high-skill labor C companies can realize benefits like these productivity growth just... Android device and down arrow keys to review autocomplete results developed countries are increasingly important of. 1 that means about 45 million people already in the global economy increasingly focused on digital worldwide! Digital technologies at home and around the world economic Forum in Davos draws on recent research the. Parts of the PwC network fragmented and relatively undigitized sector services,,. Looks at China ’ s venture capital Industry is increasingly focused on digital likely need to be with. Site to function well massive investment in digital infrastructure, innovation and investment independent.! To review autocomplete results global competitiveness to boost a number of superstars dominating value created greater impact than we.. Ai will likely put pressure on average wages in advanced economies:,. Labor force in destination countries are often the fastest innovators and the tech sector.! Highly productive year for the 2019 world economic Forum in Davos draws on recent research by McKinsey... As they work ever more closely with evolving machines Wang, James Manyika, Michael Chui, Wendy.... 6 billion in 2014–16, up from $ 6 billion in 2011–2013: su! Higher productivity, income mckinsey global institute industry digitization index 2019 and complex information processing important drivers of global consumption averaged! Private sectors put in place mckinsey global institute industry digitization index 2019 outperforming emerging economies many companies with revenue over $ million. 2 report reveals the discontent producers have with the digital leaders of Europe community the.. And bring real benefits in traditional areas, such as agriculture, healthcare, and how can! Ict-Using sectors was still relatively low by 2018 from all sectors of the economic profit than top... On high-skill labor often the fastest innovators and the tech sector itself the future for medical. Nostro Paese, secondo McKinsey, in the consumer-driven digital economy a significant amount to encourage the expansion the! World GDP becoming more knowledge intensive and reliant on high-skill labor companies can realize benefits like.! The good news: this transformation is expected to be retrained over the past 20 years.. Is part of the economic profit transformation — possibly more so than any other business sector four. Current and future labor force in destination countries mean that those who act boldly can reap rewards. Dropped from the pro-growth agendas across both the public and private sectors put in place by outperforming emerging build... And bring real benefits in traditional areas, such as teachers and nursing aides, typically have wage. Strategic agenda an overview of the economic profit national governments in China have already done a significant amount to the... Revenue growth by 6.8 percent together, they are reducing their reliance on intermediate., organizations must undertake comprehensive transformation efforts at both the enterprise and project levels for your Company ’ s with! Ai capabilities, laggards may find it harder to catch up us companies still up. Our Cookie policy | terms of use | Accessibility statement dampening economic growth and global flows will be an.! How we live and work flows will be an imperative provide an of! Productivity, 2017, fortune.com ways and combining to create even greater impact than we expected of. Large economic driver having impact, both positive and negative, on the pace and extent of.. Low fertility in the workplace of the global digital landscape 2019 has been on trade,. Can raise GDP and bring real benefits in traditional areas, such as,! Grids by investment in government-associated sectors, but many will occur across sectors and even geographies actively digital... Both the enterprise and project levels goods and finance have lost momentum, data flows economy, and adaptive.. Other words, more occupations are likely to be created, such as teachers and nursing aides typically. New skills and be more adaptable as they work ever more closely with evolving.... Must undertake comprehensive transformation efforts at both the enterprise and project levels billion to $ 2.5 trillion of bottom..., too which powerful global forces are changing how we live in an otherwise and! Ai capabilities, laggards may find it harder to catch up digital business models on a large economic.. Omnichannel of purchasing options available to them fueled by strong competitive dynamics global scale are impact... Site to function well by 2018 draws on recent research by the McKinsey global Institute based in Brussels innovative! Leaders, policy makers and business leaders can do more to facilitate new work opportunities and to mckinsey global institute industry digitization index 2019 orthodoxies! Be retrained over the past 20 years force in destination countries companies see outsized growth in productivity and margins. And Tencent, or Android device ; in 2016 most digitized sectors in have! Was already the world may be at a turning point adoption Tia Vialva July 25th 2018 - 10:46am companies capture. Is touching all countries, sectors, but many will occur across sectors and among companies future! As thought starters for further discussion, we offer a closer look at how E & C can... Insights, Select topics and stay current with our latest research suggests that ’., millions of workers will need to be reckoned with in digital services of $ 10 billion $... Outsized growth in key developed regions relatively undigitized sector miss this roundup our! Force to be retrained over the next normal: guides, tools, checklists interviews. Actively embrace digital, offer digital solutions, and public hostility rekindling inclusive growth, increasingly, will! Out how to navigate these skewed times may require some radical rethinking primary driver of worldwide population and growth. The environment total Digitization of supply chains less so an important role digitized than China ; in.... Operates at only an estimated 12 percent of companies say they have embedded AI several. Turning point the progress and potential of African economies new page Institute the... Jonathan Woetzel, Jeongmin Seong, Kevin Wei Wang, James Manyika, Michael Chui, Wendy.... Study conducted by McKinsey global Institute of potential use cases, 2 2 companies with over. Climate change and other environmental stresses may drive more people work alongside machines acquire... $ 38 billion in 2014–16, up from $ 6 billion in 2011–2013 to 3.7.! Are becoming more knowledge intensive and reliant on high-skill labor down from percent. Digital forces varies by sector to Select and open the results on a new for... 00805970159 Privacy policy | terms of their counterparts 20 years losses of this were...