If you think you know consumer behavior, think again. Middle-income consumers are feeling the squeeze and worrying about inflation but aren’t holding back on splurges. Rather than sticking to tight budgets in retirement, aging consumers are splurging too. Speaking of older shoppers, it turns out that the brand loyalty they’ve long been known for is a thing of the past. And young consumers in Asia and the Middle East are…
Three recent trends illustrate significant recent changes in Europe’s chemical markets. First, high prices for natural gas and electricity are resulting in high production costs for energy-intensive chemicals. Second, a global oversupply of many chemicals is leading to depressed unit margins and lower volumes. And third, demand is shifting to sustainable chemicals. For these reasons, many European players are focusing on how to rapidly improve their margins, typically via cost…
The recent accelerated rise in global interest rates, the fastest in decades, brought the curtain down on an extended period of cheap money but provided little clarity on the longer-term outlook. In 2024, competing forces of tepid growth, geopolitical tension, and regional conflict are creating nearly equal chances of higher-for-longer benchmark rates and rapid cuts. In the banking industry, this uncertainty presents both risks and opportunities. But in the absence…
This conversation between Maya Chorengel, a managing partner at The Rise Fund, and Alexandra Nee, partner and co-lead of the Impact Investing Service Line for McKinsey’s Private Capital Practice, was recorded on November 10, 2023. It was part of McKinsey’s Women in Private Equity Global Forum, which was held virtually, with an audience of 140 women investors from more than 60 firms across North America. The following is an abridged…
Productivity – the amount of output each worker produces – is the core of our shared global prosperity and as the world wrestles with shifting geoeconomics, it matters more than ever. Asia has experienced a productivity surge in recent years, but cannot afford to be complacent if the region’s economies are to continue closing the gap with their advanced counterparts.Recent McKinsey Global Institute research, Investing in productivity growth, shows that…
Health systems around the world are facing a host of challenges, including rising costs, clinical-workforce shortages, aging populations requiring more care (for example, to treat chronic conditions), and increasing competition from nontraditional players. At the same time, consumers are expecting new capabilities (such as digital scheduling and telemedicine) and better experiences from health systems across their end-to-end care journeys. In response, health systems are increasing their focus on digital and…
The advent of steam power in the late 18th century utterly transformed manufacturing, transportation, and construction. A new kind of upheaval is already under way—one that will energize all language-based capabilities, including communication, reasoning, analysis, sales, and marketing. In this episode of the At the Edge podcast, Reid Hoffman, a partner at venture capital firm Greylock Partners, and cofounder of LinkedIn and Inflection AI, speaks with McKinsey’s Lareina Yee about…
A hand with bright yellow nails reaches for the handle of a blue suitcase.All aboard! After the pandemic upended life and leisure as we know it, travel is roaring back. The industry is set to make a full recovery by the end of 2024, after losing 75 percent of its value in 2020. Much of this has been so-called “revenge travel,” or people embarking on international or bucket list trips…
Most large corporations have annual processes to allocate capital and other resources across business units and for strategic initiatives enterprise-wide. The typical practice is to begin with a strategy or “strategic refresh,” develop a long-term (three- to seven-year) financial plan, and lay out a highly detailed budget for the first year of the plan. Unfortunately, the processes are often both muddled and rigid; they typically take months to iterate, generate…
In this edition of Author Talks, McKinsey Global Publishing’s Mike Borruso chats with Elspeth Kirkman, chief program officer at Nesta, about her new book, Decisionscape: How Thinking Like an Artist Can Improve Our Decision Making (MIT Press, March 2024). Kirkman draws parallels between how artists create and how we make choices in our everyday lives. The book challenges us to understand why we make certain decisions and calls for us…
This article is one of McKinsey’s contributions to the Global Lighthouse Network’s latest white paper, published on December 14, 2023. The first article in this series explored the evolution of AI and how leading manufacturers have harnessed it to propel leading-edge manufacturing from the learning phase to the doing phase of the Fourth Industrial Revolution (4IR). The second article examined what artificial intelligence looks like among today’s leading manufacturers. This final installment…
For all the impressive revelations and technical feats unleashed by the sudden emergence of generative AI (gen AI), one of the most astounding aspects has been the accelerated pace of its adoption, particularly by businesses. Consider that large global enterprises spent around $15 billion on gen AI solutions in 2023, representing about 2 percent of the global enterprise software market. To put that level of growth in perspective, it took…
Payers currently face economic pressures that are likely to last a few years. Utilization of medical services has been higher than expected, providers are passing along higher costs through rate negotiations, and Medicare Advantage reimbursement rates are facing the most substantial downward pressure that payers have seen in years. In the face of these issues, artificial intelligence and automation present untapped opportunity for payers. The opportunity is sizable and available…
American shipbuilding has reached a critical inflection point—can supply keep up with demand? The US Navy, the industry’s principal customer, increased its shipbuilding budget by 12.5 percent per year from fiscal year 2020 to fiscal year 2024, and its most recent 30-year plan calls for the construction of 290 to 340 new ships by 2053. Beyond this domestic demand, there is additional demand to meet the anticipated needs of the…
Demand for luxury tourism and hospitality is expected to grow faster than for any other industry segment. This growth is being powered in part by a sharp rise in the number of individuals globally with net worths between $1 million and $30 million. But it’s also resulting from a large and expanding base of aspiring luxury travelers with net worths between $100,000 and $1 million, many of whom are younger…
After falling by 75 percent in 2020, travel is on its way to a full recovery by the end of 2024. Domestic travel is expected to grow 3 percent annually and reach 19 billion lodging nights per year by 2030. Over the same time frame, international travel should likewise ramp up to its historical average of nine billion nights. Spending on travel is expected to follow a similar trajectory, with…
As destinations and source markets have changed, tourism and hospitality companies have evolved too. Six key trends have shaped business models in this sector over the past decade. In accommodation, asset-light models like franchising and management have proliferated, though luxury and small-scale brands are opting out. Consolidation has driven economies of scale. Hotels are looking to reclaim their relationship with guests, and almost two decades in, home sharing is charting…
Tourism can help build a more connected, more vibrant world. But as tourism grows rapidly, the most visited destinations are experiencing more concentrated flows (Exhibit 1). Recent satellite data suggests that 80 percent of travelers visit just 10 percent of the world’s tourist destinations. The number of travelers and the frequency of their trips are only set to increase. A large flow of tourists, if not carefully channeled, can encumber…
What sorts of journeys do today’s travelers dream about? Where would they like to go? What do they hope to do when they get there? How much are they willing to spend on it all? And what should industry stakeholders do to adapt to the traveler psychology of the moment? To gauge what’s on the minds of current-day travelers, we surveyed more than 5,000 of them in February and March…
The McKinsey Global Institute aggregated a richly granular data set of micro-, small-, and medium-size enterprises (MSMEs) and large companies across 12 broad sectors, 68 level-two subsectors, and more than 200 level-three subsectors for 16 countries that account for more than half of global GDP. In these countries, MSMEs on average have only half the productivity of large companies, and less than that in emerging economies. Raising MSMEs to top-quartile…
For all the financial, operational, and market challenges incumbent telecom operators have faced over the past decade-plus, they still retain real competitive advantages in their efforts to spur renewed growth. Global brand recognition, a large customer base, a rich data set, and a broad array of sales channels are all vital assets they can leverage for success. But telcos won’t likely be able to realize these advantages unless they are…
This interview is part of the Leading Asia series, which features in-depth conversations with the region’s most influential leaders on what it takes to lead in Asia today.Asia–Pacific’s changing demographics, growing middle class, and insurance protection gaps are just a few trends shaping opportunities and challenges in the region's life and health insurance markets. There is clearly ample room for sustained growth in these markets. Lee Yuan Siong, AIA group…
Making great products is not enough in software these days. The “build it, and they will come” mindset will no longer lead to success in this ever-competitive space. As software products become more sophisticated and customers more discerning, the path to market acceptance has become much more complicated. Companies need different capabilities to navigate this more challenging environment, with sustainable success increasingly requiring a role devoted to understanding and priming…
In this episode of McKinsey on Building Products, a podcast dedicated to the exploration of software product management and engineering, McKinsey partner Rikki Singh spoke to Dr. Ya Xu, vice president of engineering and head of data and AI at LinkedIn. They discuss strategies engineering leaders can undertake to prioritize AI use cases, advance the development of AI technologies, and weave AI initiatives into the fabric of the company’s culture.…
The apparel and footwear industry’s standard playbook for managing global supply chains has been overtaken by recent events and rising complexity. The sprawling footprint of global supply chains was supposed to the lower the chance for disruption, but the pandemic and resulting dramatic demand shifts punctured that veil. With volatility looking more and more like the rule rather than the exception, brands face the task of reimagining their supplier strategies—and…
The promise and peril of cloud is a common refrain in many C-suites: huge economic potential and regularly underperforming reality. What’s much less clear, however, is what to do about it.Out of the more than 80 enterprises McKinsey profiled for its CloudSights database, 40 percent have found limited value in their cloud programs. In addition, half of companies five or more years into their cloud journey still have not achieved…
Fueled by record-high investment from semiconductor players and once-in-a-generation federal backing, semiconductor manufacturing capacity is poised for a massive expansion in the United States. This strategy aims to rebalance the country’s supply and demand profile to establish greater autonomy in semiconductor manufacturing, design, and intellectual property rights; as the US secretary of commerce has stated, one of the goals is to propel the United States to produce 20 percent of…
Advances in AI have accelerated dramatically over the past two years, marked by an ability to design, train, and—most important—run AI at a large scale and for many millions of users. AI’s potential impact spans sectors and could deliver positive social change. In fact, AI is already being used to further all 17 UN Sustainable Development Goals (SDGs)—from the goal of eliminating poverty to establishing sustainable cities and communities and providing…
Eric Kutcher, a senior partner at McKinsey, talks to the chief executive officers of two of Indonesia’s largest telecommunications providers—Ririek Adriansyah, chief executive officer of PT Telkom Indonesia Tbk (Telkom), and Vikram Sinha, president director and chief executive officer of Indosat Oredoo Hutchinson (Indosat or IOH). Referencing the diversity of a country that consists of thousands of islands, they talk about the challenges of creating an inclusive society and how…
In this episode of McKinsey on Building Products, a podcast dedicated to the exploration of software, product management, and engineering, McKinsey partner Rikki Singh talks to Kareem Yusuf, senior vice president of product management and growth at IBM. Throughout his career, Yusuf has worked across disciplines to sharpen his product management skills and has led IBM in creating platforms for companies to improve their sustainability practices. In their conversation, Singh…
Nonstop disruption. We have all lived through it the past several years: a global pandemic, geopolitical and economic instability, and the rise of new technologies such as generative AI (gen AI). This increasing pace of change, coupled with the anxiety of prolonged uncertainty, has created a situation in which companies can’t afford to keep doing business as usual. Indeed, workers have sent a clear message that they are disengaged to…
Midsize companies don’t dominate the headlines and investor attention the way corporate behemoths do, but they are the economic engines of many countries and a vital part of the global business ecosystem. The world’s 50,000-plus midcap companies—which we define as organizations with $200 million to $2 billion in revenue—represent more than 40 percent of the global workforce and account for approximately one-third of most economies’ GDP. These companies play a…
In just two years, the debit card has replaced cash as the preferred payment method among Spanish-speaking Latin Americans, and mobile payments have quickly gained ground, too, particularly in countries such as Argentina and Peru.Those are some of the key findings from our two comprehensive payments surveys polling more than 15,000 people in Spanish-speaking Latin America in 2021 and 2023. Respondents to our 2023 survey overwhelmingly indicated that they prefer…
Speaking up is vital to advancing meaningfully in our careers—yet many of us have made a habit of keeping quiet. In this edition of Author Talks, McKinsey Global Publishing’s Lucia Rahilly chats with Elaine Lin Hering, author, facilitator, and speaker, about her new book, Unlearning Silence: How to Speak Your Mind, Unleash Talent, and Live More Fully (Penguin Random House, March 2024). Hering explores why we often choose silence, how…
Anant Bhalla became chief executive of American Equity Investment Life (AEL) in March 2020, a turbulent time as COVID-19 was spreading around the world. When he joined AEL, which was founded in the mid-1990s and based in West Des Moines, Iowa, the company was the last big independent seller of fixed-indexed annuities in the United States. Its specialty is using its insurance and investment underwriting capabilities to promise customers the…
A year of strong funding coupled with sturdy underlying fundamentals and significant technological advances reflected strong momentum in quantum technology (QT). Updated McKinsey analysis for the third annual Quantum Technology Monitor reveals that four sectors—chemicals, life sciences, finance, and mobility—are likely to see the earliest impact from quantum computing and could gain up to $2 trillion by 2035 (see sidebar “What is quantum technology?”). Private and corporate funding for quantum technology…
The US film and television industry has an unmatched influence on popular culture and broader attitudes. The stories it tells and the trends it sparks reverberate in every corner of the country. By many outward measures, the influence of the Asian and Pacific Islander (API) community on the film and television industry has never been greater. On-screen, for example, Everything Everywhere All at Once took top honors during the 2023…
Global preconceptions about Japanese organizations have often resulted in their potential being overlooked. Yet, as discussed by Naoyuki Iwatani and Michele Raviscioni, McKinsey senior partners and co-authors of the Japanese-language book, Unlocking the Full Potential of Japanese Corporates, the strengths of Japanese corporations are numerous, ranging from focused customer orientation, employee loyalty, management resilience, and soft power. By changing mindsets that hinder growth, taking full advantage of their strengths, and…
By 2050, carbon dioxide removal could be a $1.2 trillion industry. On this episode of The McKinsey Podcast, McKinsey senior partner Mark Patel joins editorial director Roberta Fusaro to discuss McKinsey’s recent report about the business of carbon dioxide removal and how it could play a vital role in responding to hard-to-abate emissions in various sectors.In our second segment, Black Americans are especially vulnerable to the effects of climate change. McKinsey partner…
The speed of battery electric vehicle (BEV) uptake—while still not categorically breakneck—is enough to render it one of the fastest-growing segments in the automotive industry. Our projections show more than 200 new battery cell factories will be built by 2030 to keep up with rising demand. Overall, the market for cell components—comprising cathodes and anodes, separators, electrolytes, and cell packaging—is expected to grow by 19 percent per annum until 2030,…