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:
|Sectors||Global CAGR (% of GDP)|
|Telecom and IT services||7.8%|
|IP charges services||5.2%|
|Financial and insurance services||3.2%|
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 sector||Current economic value||Maximum potential value (2025E)|
|Core digital services|
e.g. IT business process management
|Newly digitizing sectors|
e.g. Financial services
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.
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.
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.
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:
- What is our mission and purpose as a company?
- How far do we go beyond shareholder capitalism? How are we accountable to different stakeholders?
- Who benefits from our economic success? How?
- What is the time horizon for managing our economic success and impact?
- What is our responsibility to our workforce, especially given future-of-work implications?
- How do we leverage data and technology responsibly and ethically?
- What are our aspirations for inclusion and diversity?
- What is our responsibility for societal and sustainability issues involving our business, and beyond?
- What are our responsibilities regarding participants in our platforms, ecosystems, supply and value chains and their impact on society?
- 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.
Mapped: Distribution of Global GDP by Region
Where does the world’s economic activity take place? This cartogram shows the $94 trillion global economy divided into 1,000 hexagons.
Mapped: The Distribution of Global GDP by Region
Gross domestic product (GDP) measures the value of goods and services that an economy produces in a given year, but in a global context, it is typically shown using country-level data.
As a result, we don’t often get to see the nuances of the global economy, such as how much specific regions and metro areas contribute to global GDP.
In these cartograms, global GDP has been normalized to a base number of 1,000 in order to show a more regional breakdown of economic activity. Created by Reddit user /BerryBlue_Blueberry, the two maps show the distribution in different ways: by nominal GDP and by GDP adjusted for purchasing power parity (PPP).
Before diving in, let us give you some context on how these maps were designed. Each hexagon on the two maps represents 0.1% of the world’s overall GDP.
The number below each region, country or metropolitan area represents the number of hexagons covered by that entity. So in the nominal GDP map, the state of New York represents 20 hexagons (i.e. 2.0% of global GDP), while Munich’s metro area is 3 hexagons (0.3%).
Countries are further broken down based on size. Countries that make up more than 0.95% of global GDP are broken down into subdivisions, while countries that are smaller than 0.1% of GDP are grouped together. Metro areas that account for over 0.25% of global GDP are featured.
Finally, it should be noted that to account for some outdated subdivision participation data, the map creator calculated 2021 estimates for this using the formula: national GDP (2021) x % of subdivision participation (2017-2020).
Nominal vs. PPP
The above map is using nominal data, while the below map accounts for differences in purchasing power (PPP).
Adjusting for PPP takes into account the relative value of currencies and purchasing power in countries around the world. For example, $100 (or its exchange equivalent in Indian rupees) is generally going to be able to buy more in India than it is in the United States.
This is because goods and services are cheaper in India, meaning you can actually purchase more there for the same amount of money.
Anomalies in Global GDP Distribution
Breaking down global GDP distribution into cartograms highlights some interesting anomalies worth considering:
- North America, Europe, and East Asia, with a combined GDP of nearly $75 trillion, make up 80% of the world’s GDP in nominal terms.
- The U.S. State of California accounts for 3.7% of the world’s GDP by itself, which ranks higher than the United Kingdom’s total contribution of 3.3%.
- Canada as a country accounts for 2% of the world’s GDP, which is comparable to the GDP contribution of the Greater Tokyo Area at 2.2%.
- With a GDP of $3 trillion, India’s contribution overshadows the GDP of the whole African continent ($2.6 trillion).
- This visualization highlights the economic might of cities better than a conventional map. One standout example of this is in Ontario, Canada. The Greater Toronto Area completely eclipses the economy of the rest of the province.
Inequality of GDP Distribution
The fact that certain countries generate most of the world’s economic output is reflected in the above cartograms, which resize countries or regions accordingly.
Compared to wealthier nations, emerging economies still account for just a tiny sliver of the pie.
India, for example, accounts for 3.2% of global GDP in nominal terms, even though it contains 17.8% of the world’s population.
That’s why on the nominal map, India is about the same size as France, the United Kingdom, or Japan’s two largest metro areas (Tokyo and Osaka-Kobe)—but of course, these wealthier places have a far higher GDP per capita.
The Top 10 Biggest Companies in Brazil
What drives some of the world’s emerging economies? From natural resources to giant banks, here are the top 10 biggest companies in Brazil.
The Top 10 Biggest Companies in Brazil
In 2009, the at-the-time emerging economies of Brazil, Russia, India, and China held their first formal summits as members of BRIC (with South Africa joining in 2010).
Together, BRICS represents 26.7% of the world’s land surface and 41.5% of its population. By GDP ranking, they’re also some of the most powerful economies in the world.
But what drives their economies? We’re highlighting the top 10 biggest companies in each country, starting with Brazil.
What Are the Biggest Public Companies in Brazil?
Brazil isn’t just one of the largest and most diverse countries in the world, it is also an economic powerhouse.
With over 213 million people, Brazil is the sixth most populous country on Earth and the largest in Latin America. It’s also the wealthiest on the continent, with the world’s 12th-largest economy.
Once a colony focused on sugar and gold, Brazil rapidly industrialized in the 20th century. Today, it is a top 10 exporter of industrial steel, with the country’s economic strength coming chiefly from natural resources and financials.
Here are Brazil’s biggest public companies by market capitalization in October 2021:
|Top 10 Companies (October 2021)||Category||Market Cap (USD)|
|Vale||Metals and Mining||$73.03B|
|Petróleo Brasileiro||Oil and Gas||$69.84B|
|Banco Santander Brasil||Financial||$24.70B|
|Rede D’Or Sao Luiz||Hospital||$23.79B|
At the top of the ranking is Vale, a metals and mining giant that is the world’s largest producer of iron ore and nickel. Also the operator of infrastructure including hydroelectricity plants, railroads, and ports, It consistently ranks as the most valuable company in Latin America.
Vale and second-ranking company Petróleo Brasileiro, Brazil’s largest oil producer, were former state-owned corporations that became privatized in the 1990s.
Finance in Brazil’s Top 10 Biggest Companies
Other than former monopolies, the top 10 biggest companies in Brazil highlight the power of the banking sector.
Five of the 10 companies with a market cap above $20 billion are in the financial industry.
They include Itaú Unibanco, the largest bank in the Southern Hemisphere, and Banco Santander Brasil, the Brazilian subsidiary of Spanish finance corp.
Another well-known subsidiary is brewing company Ambev, which produces the majority of the country’s liquors and also bottles and distributes PepsiCo products in much of Latin America. Ambev is an important piece of Belgian drink juggernaut Anheuser-Busch InBev, which is one of the world’s largest 100 companies.
Noticeably missing from the top 10 list are companies in the agriculture sector, as Brazil is the world’s largest exporter of coffee, soybeans, beef, and ethanol. Many multinational corporations have Brazilian subsidiaries or partners for supply chain access, which has recently put a spotlight on Amazon deforestation.
What other companies or industries do you associate with Brazil?
Correction: Two companies listed had errors in their market cap calculations and have been updated. All data is as of October 11, 2021.
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