McKinsey Global Institute

[upbeat music] The world has advanced so much in the past one hundred years, from electrification to global trade to unprecedented scientific breakthroughs.

Can it achieve another century of progress? That's the focus of a new book and podcast, both called A Century of Plenty, from the McKinsey Global Institute, or MGI.

When you look back at it, what you see actually happened was this stunning century of progress, but totally unfinished business.

And in fact, MGI research says we're almost exactly halfway towards empowering the world.

[upbeat music] This is The McKinsey Podcast, where we help you make sense out of the world's toughest business challenges.

I'm Roberta Fazzaro, your host for today.

We got a question from somebody who was a former managing partner at McKinsey, Ian Davis, who said, "You know, what have you learned about the past hundred years in the McKinsey Global Institute?" And, uh, we, I think, collectively said we learned a lot.

That's the genesis of the new MGI book according to Sven Smit, a senior partner emeritus at McKinsey and one of the co-authors.

Economically, the gap carries a clear cost.

The McKinsey Global Institute estimates that the full economic inclusion of women could increase Latin America's GDP by up to 14% by 2030.

While this figure applies to the region, The implication for Mexico is direct.

Without women in science and technology, the country cannot fully leverage the historic window of opportunity represented by nearshoring, supply chain relocation, and the transition toward more digital and sustainable economies.

That's Shubham Singhal.

He's a McKinsey senior partner and chair of the McKinsey Global Institute.

You know, geopolitics directly affect the state of manufacturing in the US, whether that's because of trade wars or physical conflicts or cyber intrusions.

Shubham joins me and Rebecca J. Anderson, who's a senior fellow at McKinsey Global Institute, to discuss the actions that leaders can take to lessen their exposure and hopefully ramp up their manufacturing and innovation activities.

[transition music]

This is the McKinsey Podcast, where we help you make sense out of the world's toughest business challenges.

Thanks for having us.

Thank you for having us.

yeah absolutely so well ed thank you so much been absolutely fascinating conversation i think if we take anything away from it it's like don't take the world for granted because even the basic stuff whether it's sand or or sweater um is actually amazing when you go under the surface and you know maybe one of the great hacks for us all to get more optimistic about the world is just curiosity about how the world works and how amazing it actually is so thank you for bringing that to life thank you for all you're doing um with your book material world we really look forward to seeing trade world and for any of the listeners out out there who are intrigued by some of what we've talked about here you can also check out our book a century of plenty so uh thanks again ed thanks sven and uh that's us signing off thank you yeah

Thanks for listening to the Century of Plenty podcast from the McKinsey Global Institute.

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Where's the next China? How should companies diversify or hedge against China? Well, according to the host of that private dinner, Joe Nye, chairman of McKinsey Greater China, the next China is still China.

He details why in his new book, The Next China is Still China, co-written with Nick Leung, McKinsey Global Institute director and senior partner in Hong Kong.

But we're going to find out more from Joe directly and discuss how companies can redesign their strategies to sell to China going forward.

And Joe joins me right here in the studio.

He's also the founder and executive director of the Institute of New Economic Thinking at the Oxford Martin School, a Supernumerary Fellow in economics at Oriel College, and an external professor at the Santa Fe Institute.

Before Oxford, Eric had a very illustrious career at McKinsey & Company, where he was a partner and also held leadership positions in the sustainability and climate change practice, the strategy practice, and the McKinsey Global Institute, and it's a real pleasure to have him here on the Policy Pod today.

Thanks, uh, Isabella and Diego.

Nice to be with you.

Um, and then I thought it'd be good to understand how bigger companies did these things.

Uh, so I went to McKinsey thinking I'd be there for two years and then go back, uh, uh, to the kind of Silicon Valley world, but, uh, ended up staying there for, for 18, uh, years, uh, uh, learning, learning a lot.

And then, um, when the financial crisis hit in, in 2008, um, I'd had-- I'd continued to have longstanding links to academia and be involved in academic research, particularly through the McKinsey Global Institute.

And then after the financial crisis in 2008, I decided, uh, I wanted to go back into the academic world and work on some of these big, uh, issues around, uh, how the economy works and, uh, what we could do to, to make it, uh, work better, and to bring in some of the, you know, innovative thinking I was seeing, uh, not just in economics, but from lots of other fields.

the latest

study from McKinsey Institute is that 97% of business transactions are closures and only 3% are selling.

And if those are going to private equity, like that's the least sustainable model I could probably conjure up in my mind of bundling them together, cutting haphazardly and then shipping it to somebody else and they probably shut it down at some point, right? I see it all the

time.

These tensions will lead to legal battles, pressure for policy reforms, and public calls for state intervention, a situation already evident in China.

According to the McKinsey Global Institute, MGI, demand for power in China's cities will more than double from today's level, accounting for roughly twenty percent of global energy consumption.

India's power targets are also ambitious.

If present trends continue, India's carbon dioxide emissions will grow and carbon emissions of South Asia as a whole will double by twenty thirty.

The two thousand and eight crisis and its long tail raised the prospect of an extended crisis that would undermine the social and political fabric in many Western countries and create long-term destabilizing effects.

Historical studies indicate that recessions involving financial crises tend to be deeper and require recoveries that take twice as long.

McKinsey Global Institute's, MGI's recent study of debt and de-leveraging indicates that in the years since the onset of the financial crisis, quote, "Major Western economies have only just begun de-leveraging." End quote.

Total debt has actually grown for most major Western economies, with the exception of the US, Australia, and South Korea, where the ratio of total debt to GDP has declined.

Mm-hmm.

We have a national thought leader, really a global thought leader, McKinsey Global Institute, is going to set the tone.

Okay.

And talk about how A.I., is impacting industries.