The 2008 financial crisis crimped that growth. Even small-scale entrepreneurs in provincial backwaters can now reach globally via digital platforms, transforming their business into “micro-multinationals.” Flows of goods, services and financial capital all grew as the world entered this century, propelled by the build-out of corporate supply chains and low-cost labor arbitrage. These two shifts have helped expand participation in the global economy beyond a few large countries and the largest multinational corporations. Equally striking, most of this growth will be concentrated in emerging economies. By 2025, for the first time in history, over half the world’s population will belong to the consuming class - that is, people who have some discretionary income left over after meeting basic needs.
This has contributed not just to improved human development in terms of basic services, but also enabled the emergence of vast middle and affluent classes. Alongside this technology wave has come rising global prosperity, which has lifted one billion people out of extreme poverty over the past 30 years, 730 million of those in China alone.Īlong with this disruptive technology has come rising global prosperity, which has lifted one billion people out of extreme poverty over the past 30 years - 730 million in China alone. Artificial intelligence, the biological revolution and many other world-shaping innovations are still in their infancy. The same is true of digitization: our research at the McKinsey Global Institute suggests that digitization hasn’t nearly run its course, even in advanced economies in the United States and Europe. Nearly, because there is still room for fuller and richer connections to everybody and everything. In the past 30 years, for example, the internet has facilitated global connection between nearly everybody - and nearly everything. Technology has had a profound impact on business and the economy. An Era of OpportunityĬontemporary companies face a radically changed environment. Today and in the future, the rewards for success are outsized, but so, too, is the obstacle course that must be run. How do you navigate the geopolitical and geo-economic challenges (including trade) you now face, through your value chains and platforms that span the globe?.What do you tell investors who continue to hassle you about your stock performance and short-term results, but now also demand details of your environmental, social and corporate governance performance?.How do you leverage data and technology responsibly to drive efficiency and power your business models? As you deploy artificial intelligence and automation, what responsibility do you take to retrain and redeploy workers displaced by technology?.How should you balance the interests of diverse stakeholders - for example, between environmental commitments, your suppliers and the expectations of your workers and their communities, probably around the world?.
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How do you embody your company’s purpose in such a way as to attract and retain the talented and diverse work force you need and earn the social license to operate?
This is especially true for large marketshaping companies that seek to capitalize on innovations that are altering the face of global capitalism.Ĭonsider some of the choices the CEOs of such companies will need to make - choices very different even from those leaders confronted at the new century’s dawn. It is in this environment that the role of the corporation, in society and in the global economy, is changing - bringing new challenges for the CEO.
With rising global prosperity and half the world soon entering the consumption economy, markets are burgeoning in places beyond the rich, industrialized nations.
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