Connect with us

Globalization

10 Global Insights into a Transforming World

Published

on

10 Global Insights into a Transforming World from 2019

10 Global Insights into a Transforming World from 2019

Every day, global trends are reshaping society and the business landscape.

Today’s infographic from McKinsey Global Institute (MGI) presents a snapshot of 10 insights into how the world is changing, based on its research work from 2019.

How did we get here, and where are we going?

A Connected World in Flux

Globalization is making the world “shrink” every day, as humans and trade become increasingly connected. However, there are signs that point to a new phase of globalization that is leading to different outcomes than prior years.

1. Globalization in Transition

Global exports are fundamentally shifting. Although manufactured goods are traded at higher volumes, certain services have grown up to three times faster.

The compound annual growth rate (CAGR, 2007-2017) for different sectors are as follows:

SectorsGlobal CAGR (% of GDP)
Telecom and IT services7.8%
Business services5.3%
IP charges services5.2%
Total services3.9%
Travel services3.7%
Financial and insurance services3.2%
Total goods2.4%
Transport services1.7%

This has a profound impact on the mix of industries and countries involved in this shift away from goods and towards services. Asia is coming of age in this phase of the global economy.

2. Asia’s Ascent

Trade with and within Asia is rising, and shows no signs of slowing down. The region’s economic might is growing rapidly, and with higher disposable incomes, consumption is growing too.

In China, there is a new dynamic at play.

3. China’s Changing Relationships

Compared to other developed nations, China’s economy is relatively closed. The country is re-balancing its focus towards domestic consumption and relying less on other countries for trade, technology, and capital.

At the same time, the rest of the world is increasingly exposed and tied to China for the same things—and such unequal engagement has a ripple effect on everything from financial markets to flows of technology and innovation.

Technology and the Future of Work

New technologies like artificial intelligence are sparking new opportunities, but they also raise questions about the future of work across geographies and gender.

4. Increasingly Digital India

As the costs of devices and data plummet, India’s digital adoption is surging—it closely competes with China for the highest digital population across everything from smartphone ownership to social media users.

As mass adoption of digital technologies continues, it is poised to add significant economic value to the Indian economy.

Digital sectorCurrent economic valueMaximum potential value (2025E)
Core digital services
e.g. IT business process management
$115B$250B
Newly digitizing sectors
e.g. Financial services
<$1B$170B

Companies worldwide are also integrating new technologies—changing the nature of work itself.

5. New Geography of Work

By 2030, talent and investment in the U.S. will be concentrated in a few regions—with 60% of job growth coming from just 25 hubs.

Potential Net Job Growth
These are just some examples of places which see double-digit potential net job growth by 2030. However, all regions will face unique challenges in the next decade.

6. Automation’s Effect on Gender at Work

Globally, women and men are at similar risk of losing their jobs to automation by 2030.

  • Women: 107 million FTEs
    Share of female employment, 2017: 20%
  • Men: 163 million FTEs
    Share of male employment, 2017: 21%

*FTE: full time equivalent. Based on midpoint automation scenario.

While everyone needs to adapt in the age of automation, women face more barriers. They spend up to 1.1 trillion hours on unpaid care work, nearly three times that of men (400 billion hours).

Women are also often in lower-paid roles or male-dominated professions. Additionally, many women have less access to digital technology, and limited flexibility to pursue education. These factors make it harder for women to “catch up” and bridge the gap left behind by automation.

Inequalities and Uncertainties

It’s clear that while technology generates opportunities, it also creates new social challenges. Low- and middle-income households face stagnating incomes, higher debt, and rising basic costs.

7. Declining Labor Share of Income

The U.S. labor share of income has been dropping for years—but ¾ of this decline has occurred since 2000.

Labor Share of Income
According to McKinsey Global Institute, boom-bust commodity cycles and rising depreciation are the main factors behind this trend, more so than commonly-cited automation or globalization.

Stagnating incomes mean less purchasing power, while the cost of basics are sharply rising.

8. Changing Consumption Costs

The global inequality gap has narrowed, but within developed economies, it has actually increased.

Technology and globalization have made many discretionary goods cheaper. However, basic costs such as education, housing, and healthcare have ballooned compared to the rate of inflation over the past decade.

Category Inflation
With wages stagnating, the higher costs for basics have eaten into disposable incomes in many mature economies.

A Changing Business World

Global trends drastically influence how companies compete with one another, transforming corporate dynamics worldwide.

9. Corporate Superstars

In just two decades, the distribution of economic profits has been growing increasingly wider. The top 10% of companies (>$1 billion in revenue) brings in an ever-larger share of total profits, while the losses of the bottom 10% share deepen.

  • Average profit per company, 1995-1997
    Top 10%: $0.85B
    Bottom 10%: -$1.02B
  • Average profit per company, 2014-2016
    Top 10%: $1.36B
    Bottom 10%: -$1.56B

*In 2016 dollars. Considers corporations with ≥$1 billion average sales (inflation-adjusted). Sample sizes: 2,450 companies (1996–1997) and 5,750 companies (2014–2016).

In essence, the bottom 10% destroy as much value as the top 10% create—and it has only intensified in 20 years.

10. Latin America’s Missing Middle

Latin America best exemplifies this corporate trend of companies “thriving” versus “surviving”.

Compared to similar economies, Latin American countries lack mid-size companies with over $50M in revenue. The Latin American average for firms per $1T GDP is 65 firms, while 100 firms is the benchmark average.

While Asia’s share of the largest firms is widely distributed across countries, Latin American enterprises are lagging behind.

What does the Future Hold?

CEOs and leaders will need to adapt to the new age of disruption—and quickly. To become a 21st century company, they must ask 10 crucial questions about how they operate in an increasingly complex world:

  1. What is our mission and purpose as a company?
  2. How far do we go beyond shareholder capitalism? How are we accountable to different stakeholders?
  3. Who benefits from our economic success? How?
  4. What is the time horizon for managing our economic success and impact?
  5. What is our responsibility to our workforce, especially given future-of-work implications?
  6. How do we leverage data and technology responsibly and ethically?
  7. What are our aspirations for inclusion and diversity?
  8. What is our responsibility for societal and sustainability issues involving our business, and beyond?
  9. What are our responsibilities regarding participants in our platforms, ecosystems, supply and value chains and their impact on society?
  10. How should we address the global and local (including national) imperatives and implications of how we compete, contribute and operate?

As the 10 insights suggest, global trends are profoundly altering the course of our future. Their impact varies greatly depending on demographics and region.

Everyone—business leaders, policy makers, and individuals worldwide—will need to adapt to the realities of a world in transformation.

Click for Comments

Globalization

Mapped: The Top Exports in Asian Countries

Asia’s exports span a wide range, from petroleum to technology components and textile products.

Published

on

Map displaying the top exports (as of 2022) of Asian countries, excluding Middle Eastern nations.

The Top Exports in Asian Countries

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

Asia’s exports span a wide range, from petroleum and minerals to technology components and textile products.

In this map, we display the top exports (as of 2022) of Asian countries, excluding Middle Eastern nations. Data was sourced from The Observatory of Economic Complexity.

Editor’s Note: For our most recent Middle East themed version of this map, go here.

Diverse Economies Across the Continent

Like in many other countries around the world, petroleum is a significant component of the Asian continental economy, with petroleum products as India’s top exporting category, amounting to approximately $86 billion per year in trade.

Another top product coming from Asia is integrated circuits. These are used in a multitude of applications spanning computing, communications, consumer electronics, automotive, industrial automation, medical devices, aerospace and defense.

CountryTop Export (2022)Top Export Value (USD Billions)
🇨🇳 ChinaBroadcasting Equipment$272.0
🇹🇼 TaiwanIntegrated Circuits$223.0
🇰🇷 South KoreaIntegrated Circuits$121.0
🇯🇵 JapanCars$89.0
🇮🇳 IndiaPetroleum Products$86.2
🇸🇬 SingaporeIntegrated Circuits$81.9
🇲🇾 MalaysiaIntegrated Circuits$78.9
🇻🇳 VietnamBroadcasting Equipment$58.5
🇮🇩 IndonesiaCoal Briquettes$50.8
🇰🇿 KazakhstanPetroleum Products$47.6
🇵🇭 PhilippinesIntegrated Circuits$32.4
🇦🇿 AzerbaijanPetroleum Products$19.4
🇹🇭 ThailandMachinery$19.3
🇹🇲 TurkmenistanPetroleum Products$9.2
🇧🇩 BangladeshTextiles and Garments$9.1
🇲🇳 MongoliaCoal Briquettes$6.5
🇺🇿 UzbekistanGold$5.2
🇧🇳 BruneiPetroleum Products$4.9
🇵🇰 PakistanTextiles and Garments$4.9
🇲🇲 Myanmar (Burma)Ore & Minerals$4.1
🇰🇭 CambodiaTextiles and Garments$3.1
🇱🇦 LaosElectricity$2.4
🇱🇰 Sri LankaTea$1.3
🇬🇪 GeorgiaOre & Minerals$1.0
🇦🇲 ArmeniaOre & Minerals$0.7
🇹🇯 TajikistanGold$0.6
🇦🇫 AfghanistanCoal Briquettes$0.4
🇲🇻 MaldivesPlanes, Helicopters, Spacecraft$0.4
🇧🇹 BhutanOre & Minerals$0.3
🇹🇱 Timor-Leste (East Timor)Petroleum Products$0.3
🇳🇵 NepalPalm Oil$0.2
🇰🇬 KyrgyzstanPetroleum Products$0.1
🇰🇵 North KoreaOre & Minerals$0.03

In addition, the region is also a big manufacturer of semiconductors, crucial for applications ranging from telecommunications and artificial intelligence to renewable energy and healthcare. Taiwan holds a 68% share of the advanced semiconductor market.

Pakistan, Bangladesh, and Cambodia are major producers of textile products such as t-shirts, sweaters, and household linens. Most of their products go to the United States and Europe, feeding popular outfit brands.

Asia stands out as a top producer of minerals and fuel, with Afghanistan, Indonesia, and Mongolia being top producers of coal briquettes used for heating, cooking, and industrial processes, while Armenia, Georgia, Bhutan, Myanmar (Burma), and North Korea rely on ore and mineral extraction as their top exporting sector.

The largest Asian economy, China, is known for the production of a variety of products, but its top exports come from broadcasting equipment, including TVs, cameras, and radios.

Continue Reading
Visualizing Asia's Water Dilemma

Subscribe

Popular