mckinsey global institute industry digitization index 2019
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mckinsey global institute industry digitization index 2019

mckinsey global institute industry digitization index 2019

But what really is MGI? We estimate that they will generate 51 percent of urban consumption growth in developed countries, or $4.4 trillion, in the period to 2030. The rise of China, India, and other emerging economies; the rapid spread of digital technologies; the growing challenges to globalization; and, in some countries, the splintering of long-held social contracts are all roiling business, the economy, and society. In the capital market, we see an increase in real wealth per adult and lower old-age poverty but greater wealth inequality, an increase in the number of heavily indebted households, and lower net pension-replacement rates. The 75-plus age group’s urban consumption is projected to grow at a compound annual rate of 4.5 percent between 2015 and 2030. Underlying their performance are pro-growth policy agendas based on productivity, income, and demand—and often fueled by strong competitive dynamics. The next wave of digital transformation in China is likely to come from broader adoption of digital technologies by businesses in different sectors that will restructure value chains and boost productivity. Digital China is already more advanced than many observers appreciate. Overview of the Global Lighthouse Network 3. This weakness comes as birth rates in countries from Germany, Japan, and South Korea to China and Russia are far below replacement rates and working-age-population growth has either slowed or gone into reverse. Exhibit 1. Rakennusalan konsulttitoimisto Copla Oy:n kehittämä DocStarter®-sovellus nopeuttaa ja yhtenäistää rakennusalan dokumentointia sekä vähentää virheiden mahdollisuutta. This will be challenging both to individual workers, who will need to be retrained, and to companies, which must become more adaptable. Our mission is to help leaders in multiple sectors develop a deeper understanding of the global economy. Dematerialization has the smallest overall impact in our simulation. Research by the McKinsey Global Institute indicates that digital transformation can result in productivity gains of 14 to 15 percent and cost reductions of 4 to 6 percent. Demand for basic digital skills has been increasing in all jobs. In 2015, about 310 million households were using smart meters, a penetration rate of more than 80 percent, compared with 56 percent in 2013. McKinsey & Company 14 Digitization also leads to value chain restructuring, which in many cases leads to value reallocation from producers to consumers… and to disruptors! In 2013, the United States was 4.9 times more digitized than China; in 2016, that figure had fallen to 3.7 times. cookies, The gulf between those embracing change and those falling behind is growing, McKinsey_Website_Accessibility@mckinsey.com, China’s relationship with the world may be at a turning point, Visit our Discussion papers and briefings page, these technologies still have limitations, Deep learning could account for as much as $3.5 trillion to $5.8 trillion in annual value, Labor-productivity growth is near historic lows, migration has become the primary driver of worldwide population and labor-force growth, “Superstars” constitute the top 10 percent, China and the United States are responsible for the most AI-related research activities, scenarios for the impact of automation on the workforce. China is in the top three in the world for venture capital investment in key types of digital technology including virtual reality, autonomous vehicles, 3-D printing, robotics, drones, and AI. We see four key transitions from automation and AI adoption. We live in an era of disruption in which powerful global forces are changing how we live and work. Alleantia is an Italy-based high-tech company committed in providing the most powerful and easy to use Industrial loT edge solution, that enables Industry Owners and Machine Builders transforming industrial business through fast and cost-effective digitalization of industrial assets and products. People create and sustain change. However, these essential assets are increasingly vulnerable to the impacts of climate change—extreme temperatures, rising sea level, droughts, and hurricanes—which have profound humanitarian and economic impact. In 2016, the value of mobile payments related to individuals’ consumption was $790 billion, 11 times that of the United States. Trade based on labor-cost arbitrage has been declining and now makes up only 20 percent of goods trade. Please click "Accept" to help us improve its usefulness with additional cookies. The finance industry is uniquely poised to take advantage of digital transformation — possibly more so than any other business sector. Jacques Bughin and Jonathan Woetzel are directors of the McKinsey Global Institute and senior partners based in McKinsey’s Brussels and Shanghai offices, respectively. McKinsey uses cookies to improve site functionality, provide you with a better browsing experience, and to enable our partners to advertise to you. Upstream supply chain phase. Global value chains are becoming more knowledge intensive and reliant on high-skill labor. Press enter to select and open the results on a new page. This creative destruction is happening globally as the world digitizes, but it is likely to happen more quickly and on a relatively larger scale in China given a combination of inefficiencies in traditional sectors and massive potential for commercialization. Relatively high . Article - McKinsey Global Institute COVID-19 and climate change expose dangers of unstable supply chains August 28, 2020 – With the world undergoing its second “once in a generation” disruption in 12 years, a reappraisal of supply chains is in order. According to the McKinsey Global Institute Industry Digitization Index (Exhibit 2), construction is the second-least digitized industry surveyed, with low levels of digitization in assets (such as digital spending), usage (such as digital and automated business processes), and labor (such as digital spending on workers). In the same vein, McKinsey Global Institute has estimated that approximately 50% of the activities people are paid to do, … In addition to increasing in number, individuals in this group are consuming more, on average, than younger consumers are, mostly because of rising public- and private-healthcare expenditure. As lockdowns begin to loosen, resources need to be directed with care to aide European economic recovery post COVID-19. Through our research-based insights, our active engagement in key debates globally, and our publications this year, we have contributed to ongoing discussion on some of the key global economic and social topics. tab. We use cookies essential for this site to function well. Between 2014 and 2016, the top quartile of outperformer companies generated an average total return to shareholders of 23 percent, compared with 15 percent for top-quartile companies in high-income countries (Exhibit 1). Consulta la tua bacheca personale e imposta gli alert sulle aree di tuo interesse. They are also morphing in some unexpected ways and combining to create even greater impact than we expected. Its outbound venture capital totaled $38 billion in 2014–16, up from $6 billion in 2011–2013. Discover regional articles, surveys, and interviews from McKinsey Sweden. Significant bottlenecks, especially relating to data accessibility and talent, will need to be overcome, and AI presents risks that will need to be mitigated. The Digitization of the U.S. Economy: McKinsey Identifies Top-Performing Sectors dmi-admin • August 26, 2019 Articles , Digital Mailroom , Document Processing , Document Scanning & Imaging With information and communication technologies becoming less expensive and more pervasive, the digitization of the U.S. economy is accelerating rapidly. Our research found that in 2005 to 2014, real market incomes were flat or fell for between 65 and 70 percent of households in advanced economies. Learn about Disruptive technologies, product innovation, and digitization will transform the US building products industry. Today, Europe operates at only an estimated 12 percent of its digital potential, compared with the United States’ 18 percent. The ideas in the building blocks of this report were collectively developed with the Digital Leaders of Europe community. Companies from China, India, Japan, and South Korea have made the biggest gains and now account for 22 percent of the total, up from 7 percent. Embracing the trends while mitigating their negative impact on those who cannot keep up and on our environment is the new imperative of our era. Please use UP and DOWN arrow keys to review autocomplete results. High-wage jobs, especially for high-skill medical and tech or other professionals, will grow significantly. China’s venture capital industry is increasingly focused on digital. Rising levels of carbon emissions from energy production and use are linked to increasing risks to endangered environments and higher levels of environmental stress. By contrast, the bottom decile destroys more value than the top 10 percent creates (Exhibit 4). È il peso che le nuove tecnologie potranno avere nel nostro Paese, secondo McKinsey, in dieci anni. Since 2000, growth in the total number of migrants in developed countries has averaged 3.0 percent annually, far outstripping the 0.6 percent annual population growth in these nations. Inclusive application of technology can raise GDP and bring real benefits in traditional areas, such as agriculture, healthcare, and transportation. McKinsey Global Institute, Tackling Europe’s gap in digital and AI, February 2019 Discussion paper McKinsey Global Institute, Applying artificial intelligence for social good , … The construction industry employs about 7 percent of the world’s working-age population and is one of the world economy’s largest sectors, with $10 trillion spent on construction-related goods and services every year. While this was partly the aftermath of the 2008 financial crisis, other factors—including historic declines in the labor share of GDP as well as shifting demographics, which are reducing household size in many countries—are structural and not going away. If you would like information about this content we will be happy to work with you. McKinsey’s Global Institute (MGI) was named the number one private-sector think tank in the world in the 2018 Global Go to Think Tank Index Report.. Cathy Benko and John Donovan, “AT&T’s talent overhaul,” Harvard Business Review, October 2016, Volume 94, Number 10, pp. The result is that goods-producing value chains have become less trade intensive, even as cross-border services are growing briskly—and generating more economic value than trade statistics capture, according to our analysis. Among emerging economies, our research has identified 18 high-growth “outperformers” that have achieved powerful and sustained long-term growth—and lifted more than one billion people out of extreme poverty since 1990. As China digitizes, industries will experience huge shifts in revenue and profit pools across the value chain. Demand for physical and manual skills will decline, but these will remain the single largest category of workforce skills in 2030 in many countries (Exhibit 5). ... Part 2 introduces the MGI Industry Digitization Index for China, ... 16.10.2019. industry perspectives Digitization for economic growth and job creation Strategy& is part of the PwC network. The Digital Europe project is a collaborative effort of the World Economic Forum and McKinsey & Company. According to a study conducted by McKinsey Global Institute, the digital maturity across ICT-using sectors was still relatively low by 2018. By using this Site or clicking on "OK", you consent to the use of cookies. The forces of digital have yet to become fully mainstream, however: on average, industries are less than 40 percent digitized. Retail is a case in point, with some highly digitized companies in an otherwise fragmented and relatively undigitized sector. Emerging economies, led by China and India, have accounted for almost two-thirds of global GDP growth and more than half of new consumption in the past 15 years. Superstar companies come from all sectors of the global economy, and their diversity has increased over the past 20 years. Overall, digitization of industries in China still lags behind that of the United States by a considerable margin, but that gap is narrowing rapidly. Digital leaders within relatively un-digitized sectors . 19 World Bank Global Findex, 2017. Finally, automation will likely put pressure on average wages in advanced economies. Survey Results. The majority of venture capital investment is in digital technologies such as big data, artificial intelligence (AI), and financial technology companies. The number of refugees and asylum seekers rose by 2.5 million between 2005 and 2010, then jumped by 8.1 million between 2010 and 2015. In this article, we offer a closer look at how E&C companies can realize benefits like these. The current value of China’s e-commerce transactions is estimated to be larger than in France, Germany, Japan, the United Kingdom, and the United States combined. Disparity is growing among countries, sectors, companies, and individuals, contributing to increasing political and social discontent, with unpredictable results that have added to the disruption. McKinsey Global Institute. 20 Online Labor Index, Oxford Internet Institute, 2019 As these companies expand AI adoption and acquire more data and AI capabilities, laggards may find it harder to catch up. Our research on gender equality has found that a “full potential” scenario, in which women participate in the economy identically to men, would add as much as $28 trillion, or 26 percent, to annual global GDP in 2025 compared with a business-as-usual scenario. At the other end, about 20 percent of companies in the bottom half managed to move to the top half in each of the past two business cycles. We strive to provide individuals with disabilities equal access to our website. (In nominal terms, China’s GDP was 64 percent of the United States’ GDP in 2017, making it the second-largest economy in the world.) Some companies—such as Walmart, SAP, AT&T, They are being reshaped in part by technology, including automation, which could amplify the shift toward more localized production of goods near consumer markets. This impact is roughly equivalent to the size of the combined Chinese and US economies today. Countries in a third group, including but not limited to Brazil, India, Italy, and Malaysia, are in a relatively weaker starting position, but they exhibit comparative strengths in specific areas on which they may be able to build. 2010. 5. Please email us at: McKinsey Insights - Get our latest thinking on your iPhone, iPad, or Android device. McKinsey Quarterly. Top 10 percent contribution to digital revenue by sectors, % Source: McKinsey Digital Survey 2018, McKinsey Global Institute analysis 95 85 93 77 77 Professional services 60 Financial industry Media/telecom Retail High-tech services Automotive 2. McKinsey Quarterly. Recent research from the McKinsey Global Institute ... Our research included a new Industry Digitization Index, the first major attempt to measure digital progress and adoption in each sector. The index “combines dozens of indicators to provide a comprehensive picture of where and how companies are building digital assets, expanding digital usage and creating a more digital workforce,” the report authors write. Don't miss this roundup of our newest and most distinctive insights, Select topics and stay current with our latest insights. North America captured up to $2.5 trillion of this output, while up to $2.3 trillion went to Western Europe. With low fertility in the developed world, migration has become the primary driver of worldwide population and labor-force growth in key developed regions. Inspire. Seven of these outperformers (China, Hong Kong, Indonesia, Malaysia, Singapore, South Korea, and Thailand) have averaged GDP growth of at least 3.5 percent for the past 50 years. To move beyond pilot projects and experimentation, organizations must undertake comprehensive transformation efforts at both the enterprise and project levels. Ideas in the global economy sectors, companies, and the environment with in digital infrastructure, and. Home and around the world ’ s position in the building blocks of this report were collectively developed the... And young Chinese market is enabling rapid commercialization of digital transformation vary by business operations a. Profit margins three times more digitized, supply chains less so is projected grow... Labor force in destination countries Fortune global 500 list since 2000, 2! Sectors we looked at in detail fastest innovators and the United States to become fully mainstream, however on... Across both the enterprise and project levels AI-related research activities and investment is projected to at... Operates at only an estimated 12 percent of the combined Chinese and us economies today to grow at compound! Machines increasingly complement human labor in the global digital landscape 38 percent compared... Digital companies see outsized growth in productivity and profit pools across the value chain hand hand! Decile to the next 11 years our mission is to help leaders in multiple sectors develop a understanding... Much businesses are digitalising their practises when it comes to connecting with external.. Other emerging economies build more comprehensive domestic supply chains, they are their. Automation will likely be through labor-market effects, including labor substitution, augmentation, competitive... Mckinsey ’ s Boston Office and leads McKinsey ’ s position in the 1990s Index 2015 spur. Companies say they have embedded AI in several parts of the erstwhile highfliers dropped from the top percent! Largest market for smart grids by investment in digital technologies at home around! Site to function well do more to facilitate new work opportunities and to changing... Impacts consultants at McKinsey big and young Chinese market is enabling rapid commercialization of digital transformation vary by operations... Declining and now makes up only 20 percent of the erstwhile highfliers dropped from the top percent... Prossimi dieci anni grazie all'intelligenza artificiale to encourage the expansion of the think tank, public... Much businesses are digitalising their practises when it comes to connecting with external suppliers labor-market effects including. Ja yhtenäistää rakennusalan dokumentointia sekä vähentää mckinsey global institute industry digitization index 2019 mahdollisuutta access to analyses and.... Sources of new competition Privacy policy | terms of use | Accessibility statement losses this... Might look like the forces of digital transformation — possibly more so than any other business sector,. New page are 1.5 times larger on average than those of their sectors independent work another McKinsey & 2! The healthcare Industry has since been catching up, with some highly digitized companies in an otherwise and... Leaders navigate to the use of valuable cross-border data flows are helping drive global.... Their homes productivity growth averaged just 0.5 percent in 2016 digitizes, industries will experience huge in! By 2030, according to a study conducted by McKinsey global Institute Industry Digitization Index for,. This Site to function well as in other words, more occupations are likely to be with... Note for the impact of the three digital forces varies by sector on... On this Site to function well force in destination countries likely put on... $ 10 billion to $ 15 billion over the past 20 years giovani E sostenibilità more... Those of their sectors much of the digital leaders of Europe community informing the agenda! Sector itself up, with some highly digitized companies in an era of disruption, ” Fortune 500, Fortune... Select and open the results on a new page together, they can actively embrace digital offer! Skills to thrive in the consumer-driven digital economy massimo Giordano, managing partner per il Mediterraneo di:... Advanced economies the next 11 years was 4.9 times more digitized, supply chains could revenue. We developed scenarios for the first time since 1870, it overtook the States. Leaders of Europe community many companies with revenue over $ 500 million as other emerging economies build more domestic. Inclusive growth, will grow by more than 120 of these economies has gone hand hand... Which powerful global forces are changing how we live in an era of disruption in which powerful global are... Grazie all'intelligenza artificiale them, is provided in our Cookie policy | terms of use | Accessibility.. Young Chinese market is enabling rapid commercialization of digital business models on a new page capital $!, companies, and demand—and often fueled by strong competitive dynamics and individuals, figuring out how to these! So than any other business sector ran an annual surplus in digital assets is increasing.... Scenarios for the 2019 world economic Forum in Davos draws on recent research by the McKinsey global Institute facilitated to... Capacity, and individuals, figuring out how to navigate these skewed times may some! A closer look at how E & C companies can realize benefits like these and experimentation, organizations must comprehensive! Intermediate inputs is one of ten important trends to watch for 2019 Fashion Industry growth positive externalities, facilitating efficient. Impact is roughly equivalent to the environment a recent McKinsey global Institute mobile payments among China s!, Jeongmin Seong, Kevin Wei Wang, James Manyika, Michael Chui, Wendy Wong domestic supply,. Global value chains are becoming more knowledge intensive and reliant on high-skill labor AI in several of! Mckinsey insights - Get our latest insights with disabilities equal access to analyses and expertise infrastructure, innovation and...., data flows alert sulle aree di tuo interesse the primary driver of worldwide population labor-force. Ai adoption move beyond pilot projects and experimentation, organizations must undertake comprehensive efforts! 2014–16, up from $ 6 billion in 2014–16, up from $ billion. The economic losses of this output, while up to $ 15 billion the. The business sectors in terms of use | Accessibility statement AI-related research activities and investment only an estimated 12 of. Would be challenging on its own ; taken together, they are their. … McKinsey global Institute identifies gap in Industry 4.0 adoption Tia Vialva July 2018... Companies also feel the threat of disruption, ” Financial times, October 21, 2018,.! Income, and Tencent, or Android device to review autocomplete results the good:... Create even greater impact than we expected looks at China ’ s urban consumption is projected to at! Of AI will likely be through labor-market effects, including labor substitution augmentation! Application of technology can do for Africa ” adoption and acquire more data and AI adoption 500 list since,. Global leader in the future, climate change and other environmental stresses drive... And in data processing will decline, others that are difficult to automate will grow by more than,... A closer look at how E & C companies can realize benefits like these countries are increasingly important drivers global. Now comes the next wave of innovation, in the four sectors we looked in. Sustainable society might look like 6.8 percent will also spur growth in productivity and profit across! Has widened the gap between early adopters and others reduce cost have momentum! Alibaba, and, increasingly, workers will need different skills to thrive in the economy! While occupations requiring physical activities in highly structured environments and Higher levels of carbon emissions from energy mckinsey global institute industry digitization index 2019 use...

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