McKinsey & Company

Making government more productive offers substantial rewards for the public. A McKinsey study across 42 countries found that if public services could reach the productivity levels of the leading performers in their peer groups, the improvement would be worth an estimated $3.5 trillion per year. Since then, governments have spent more on public services, especially during the COVID-19 pandemic. Allowing for this increase and inflation, the productivity gap could be…

By 2040, Asia could contribute 42 percent of global GDP, be home to 60 percent of the Fortune Global 500 companies, and have 55 percent of the world’s total workforce. These factors form a favorable macro backdrop for Asian companies, driving the emergence of what we call Asian global players. Asian companies are making rapid advances in areas such as digital services, fintech, healthcare, advanced manufacturing, and clean energy. Their…

We have finally left 2024 behind us and are looking forward to what the new year 2025–the Year of the Snake–will bring for China consumption. Looking back at 2024, we’ve seen a steep contrast between perception and reality. Consumer and business sentiment remains at an all-time low, and there is no evidence that this will change anytime soon. At the same time, China yet again delivered 5.0 percent gross domestic…

Trade relationships are continuing to reconfigure, and changing geopolitics is a major reason. The United States has continued to shift trade away from China and toward other economies such as Mexico and Vietnam. In some cases, this is due to these economies forming an intermediate step in trade flows between China and the United States. European economies have moved away from trade with Russia and increased trade with other partners,…

With the energy transition gathering pace, businesses are prioritizing cleaner energy sources and electrification to meet decarbonization goals and reduce energy costs. They are taking a more active role in managing their energy supply with the associated services, for example, through the direct procurement of clean energy via power purchase agreements (PPAs). This is being achieved by generating and managing on-site energy as “prosumers” and optimizing equipment and installations that…

In this edition of Author Talks, McKinsey Global Publishing’s Alexandra Mondalek chats with McKinsey senior partners Kweilin Ellingrud, Lareina Yee, and María del Mar Martínez about their new book, The Broken Rung: When the Career Ladder Breaks for Women—and How They Can Succeed in Spite of It (Harvard Business Review, March 2025). The “broken rung” is the missing step on the career ladder that keeps women from reaching their first…

Access to cash is critically important for medtech companies. Cash allows medtech leaders to acquire emerging technologies and develop their own new products, which in turn drives the kind of innovation that improves patient outcomes and boosts shareholder value. But many medtech organizations have too much of their cash tied up in excess inventory on shelves in too many locations. Typically, medtech companies hold as much as three times more…

When companies embark on transformations, they naturally focus on the big picture: how a transformation will allow them to perform better through cost-out measures or how they can implement high-impact growth strategies to become bigger, leaner, and better. In companies’ rush toward change, however, they often end up overlooking or deprioritizing the impact that improving their net working capital can have as they begin the transformation journey, potentially thwarting early…

US auto retailers have embraced multiple new technologies over the past decade, from next-generation core systems to AI and digital sales platforms. Yet, despite sometimes significant investments, dealer productivity has remained stuck in a rut, with vehicle sales per employee averaging between 14 and 16 each year. To boost technology’s impact, a new playbook is required—one that shifts the focus away from point solutions and toward collaboration and deeper tech…

For Robert Hormats, two of the biggest geopolitical stories of the past decade are the retrenchment of globalization and the rise of a multi-polar world. He is well positioned to make that judgment. Hormats has been a senior official in the administrations of five different American presidents, including most recently as the Under Secretary of State for Economic Growth, Energy, and the Environment from 2009 to 2013. He is also…

Data powers AI solutions, but developing the capabilities to gather, structure, and deploy the right data is a daunting challenge. For the real estate industry, the task becomes a lot easier when leaders know which questions they are trying to answer. Katy McLaughlin: Let’s say a real estate leader wants to take advantage of some of the new AI tools. How do they approach working with data to get started?…

Economic uncertainty is on the rise due to widespread geopolitical changes. While global growth remains mostly stable for now, businesses and investors are closely monitoring these developments for potential disruptions to the economic landscape (Exhibit 1). With President Trump taking office in January, businesses and analysts are seeking clarity on what his second term might bring in terms of economic policies. The US Federal Reserve and other leading central banks…

Closing the women’s health gap: A $1 trillion opportunity to improve lives and economies, published in 2024 by the World Economic Forum (the Forum) in collaboration with the McKinsey Health Institute (MHI), reported that the women’s health gap correlates with women living in poor health for 25 percent more of their lives than men do. Closing the women’s health gap could yield 75 million disability-adjusted life years annually—the equivalent of…

Separations have become a widely adopted strategy for creating value, but their popularity does not mean these complex transactions are always effective. For instance, spin-offs—one of the main types of corporate separations, alongside divestitures and carveouts—have hit record numbers in recent years, but these deals are not guaranteed to create value for both the remaining and new businesses. Through our decades of research and experience supporting organizations in a range of…

With global business corridors subject to geopolitical shifts and structural realignment, Asia’s companies stand at a new crossroads—where old formulas for success are stalling, and new highways to growth are emerging. Long-established global trade and investment patterns are reconfiguring in response to geopolitical tensions, a “just in case” rather than a “just in time” mindset, and increasing sophistication in Asia’s skills and capabilities. Companies operating in Asia—local, regional, and multinational—have…

Over the past two years, interest in value chain optimization (VCO) has grown as downstream refining businesses come up against volatile market conditions, an emergence of “pure play” portfolios, and technological change. However, many organizations do not take a holistic approach when assessing their value chain; instead they look at each process in a piecemeal fashion, adding cost and inefficiency. VCO, also known in refining organizations as supply chain planning…

The world is faced with a dual imperative in the energy transition: the energy system has to be decarbonized, but much more energy is going to be needed in the future. In this episode, Janet Bush, executive editor at McKinsey Global Institute (MGI), talks to McKinsey experts Chris Bradley and Vishal Agarwal about the hurdles that need to be cleared, particularly in Asia, to achieve decarbonization.An edited transcript of the…

Technology is increasingly shaping the prosperity and sovereignty of nations. The development of disruptive technologies such as AI, along with geopolitical events, is creating new arenas of competition, centered on investment in the innovation, production, and adoption of advanced technologies. However, large European corporations invested €700 billion a year—or €3,000 per capita—less than their US counterparts between 2015 and 2022, particularly in technology, as returns on invested capital (ROIC) for…

Daniel Yergin explained the state of the world in his 1990 Pulitzer Prize–winning book, The Prize: The Epic Quest for Oil, Money and Power. He did it again in 1998 with Commanding Heights: The Battle for the World Economy and in 2011 with The Quest: Energy, Security, and the Remaking of the Modern World. His most recent book, The New Map: Energy, Climate, and the Clash of Nations, detailed how…

Against a backdrop of light blue, three fluffy white clouds release a robust rain of blue pixels. Software as a service (SaaS) refers to cloud-based software programs delivered to users over the internet. You probably use SaaS products even if you don’t realize it; in fact, much of our online lives are supported by SaaS. Google Workspace tools—including Gmail, Google Docs, and more—are SaaS products, as are Microsoft Outlook, Slack, Zoom,…

In 2025, corporate action on nature has evolved from what was often seen as an environmental obligation into a strategic necessity. Taking action is not just about preserving our natural resources—it is a key element of business strategy. Nature plays a critical role as a foundation for the global economy, with more than half the world’s GDP dependent on nature. In this way, nature degradation—including biodiversity loss, ecosystem collapse, and…

As the world grapples with rapid technological advancements, demographic shifts, and evolving work paradigms, it is vital to invest in employee health. Why prioritize workforce health? Investing in employee health can substantially increase economic returns. Research by the McKinsey Health Institute in collaboration with the World Economic Forum indicates that enhanced employee health and well-being could generate up to $11.7 trillion in global economic value. Organizations that prioritize health often…

While consumer habits and technologies have changed rapidly, the technology function within organizations has tended to be slower to adapt. That realization—and the desire to create experiences that its customers expect—inspired Verizon Consumer and Business Group (Verizon Consumer Group) to make sweeping changes to its technology organization, from a focus on supporting channels and platforms to supporting complete customer journeys. This shift required a broad set of architectural and operational…

Business leaders today confront a changing world order: intensifying regional conflicts, rising instability, and potential shifts in trade relationships and policy. On this episode of The McKinsey Podcast, Cindy Levy and Shubham Singhal, global coleaders of McKinsey’s geopolitics work, speak with global editorial director Lucia Rahilly about how leaders can orient themselves within this evolving geopolitical landscape and, in particular, begin to move beyond mitigating risk to finding and mobilizing on new…

Government agencies often undertake complex missions that can have a large impact on society. Whether they involve modernizing infrastructure or establishing nationwide health programs, such missions could be described as “big, hairy, audacious goals”—the term coined by management experts Jim Collins and Jerry Porras in their book Built to Last. But measuring the success of such efforts can be difficult. Many public sector agencies tend to fall back on conventional…

Indian farmers expect better near-term prospects following a year of steady output and multiple years of market and weather-related disruptions. About three-quarters of farmers (76 percent) say they anticipate higher profits over the next two years, with more than 65 percent citing improved yields and higher crop prices as catalysts. This is a substantial improvement over 2022, when just 37 percent of farmers expected increased profits. These are among the…

By the numbers, the United Kingdom’s start-up technology ecosystem has a lot to be proud of. By value, it is the largest in Europe, employing over three million people and surpassing $1 trillion in valuation in 2024. Much of start-up technology investment in the United Kingdom goes to climate technology businesses, which have a positive environmental impact at their core. With over 5,000 budding climate technology start-ups and scale-ups, second…

At a glance Falling fertility rates are propelling major economies toward population collapse in this century. Two-thirds of humanity lives in countries with fertility below the replacement rate of 2.1 children per family. By 2100, populations in some major economies will fall by 20 to 50 percent, based on UN projections. Age structures are inverting—from pyramids to obelisks—as the number of older people grows and the number of younger people…

Over the past five years, the luxury industry experienced a period of exceptional value creation. Between 2019 and 2023, unprecedented demand for personal luxury goods—fashion, leather goods, watches, and jewelry among them—combined with a deep well of supply allowed the sector to achieve a 5 percent compound annual growth rate. Luxury brands outperformed global markets and achieved new profitability records. The pace of growth across the industry was remarkable and…

In McKinsey’s latest ConsumerWise research, consumers report feeling more optimistic about the US economy than they have all year. Even so, US consumer optimism overall is still lower than prepandemic levels, and more than half of consumers (53 percent) report mixed feelings or being pessimistic about the state of the economy.For decades, consumer sentiment and consumer spending have moved in sync—when people feel unsure about the economy, they spend less. But…

Life sciences is on the cusp of a new era of innovation. The convergence of breakthrough technologies, widespread access to data, and deeper insights into complex biological systems is revolutionizing how the industry approaches R&D. For instance, venture capital funding for machine-learning-enabled drug discovery surged more than sevenfold from 2019 to 2022, according to McKinsey analysis. Interest in innovative modalities such as antibody–drug conjugates (ADCs) remains strong, with the top…

The competition among biopharmaceutical companies for externally sourced assets is heating up. Despite recent successes delivering innovative therapies at a faster pace and achieving solid returns for shareholders, demand persists across a range of unmet needs. And yet, companies are increasingly pursuing the same disease areas and targets. This “herding” behavior makes it less likely that any company can outperform. Further, the breadth and complexity of all available targets and…

Innovation is flourishing in the biopharmaceutical industry. Over the past decade, the volume of Phase I candidates in the drug development pipeline has grown by 60 percent, promising potential breakthroughs in treating a wide range of diseases. At the same time, there has been a noticeable shift across the industry toward outsourcing R&D activities. Driven by the need for flexibility, specialized expertise, and wider global reach, pharmaceutical organizations have engaged…

In this episode of McKinsey on Building Products, McKinsey partner Rikki Singh sits down with Yuhki Yamashita, chief product officer at Figma, a company that provides collaborative online design tools. With a career in product and design at companies of all sizes, Yamashita has an approach to product development that centers on generating “user love.” During their conversation, Singh and Yamashita discuss building and tapping into communities to make better…

Power politics. Wars. Trade battles. Climate change. Pandemics. Geopolitics is increasingly influencing how businesses operate, pushing senior leaders to look well beyond the walls of the corner office. Council on Foreign Relations president Michael Froman has spent his career bridging these worlds, from senior positions in the administrations of Presidents Bill Clinton and Barack Obama to executive roles at Citigroup and Mastercard and serving on the board of The Walt…

Since 2019, the United States healthcare industry has experienced substantial financial pressure, with industry EBITDA as a proportion of the National Health Expenditure declining by an estimated 150 basis points (Exhibit 1). The decline has hit payers and providers particularly hard—payers’ estimated margins in 2024 could be at their lowest in a decade. Inflationary pressures have not yet been fully absorbed within the healthcare system, and providers continue to face…

Digital payments in the B2B arena have lagged far behind consumer e-commerce, even with the big shift to digital brought about by the COVID-19 pandemic. The vast majority of B2B payments occur between small and midsize businesses (SMBs), which are the target market for the B2B financial operations platform BILL. The company seeks to streamline and simplify SMBs’ financial operations, including accounts payable, receivables, and expense management. In addition, BILL…

Back in July 2023, researchers at the McKinsey Global Institute estimated that gen AI could unlock between $60 billion and $110 billion a year in economic value for the pharmaceutical and medical products industries, boosting productivity and innovation in domains across the industry’s value chain—from the way new treatments are discovered to how they are marketed and administered by physicians. Six months later, McKinsey experts dug deeper into those numbers,…

Life science companies have traditionally kept patients and consumers at arm’s length. Pharmaceutical, biotech, and medtech companies have viewed providers and payers, not patients, as their key customers and have rarely interacted with them as end customers. This approach has had to evolve in recent years. Consumers are now accustomed to apps and smartwatches that provide a 360-degree view of their well-being, and they engage with direct-to-consumer brands such as…

Despite dedicated efforts across the biopharmaceutical industry to streamline clinical development, clinical trials remain complex, costly, and time-consuming. These challenges are compounded by an increasingly competitive and crowded trial landscape. Yet accelerating clinical development remains crucial—not just for patients but for the enterprise. A 12-month reduction in the clinical development timeline can add more than $400 million in net present value (NPV) across a sponsor’s portfolio while delivering immeasurable benefits to…