Very Low Adoption of Technology in our Industry 1 Based on data of top 20 E&C companies by market value Globally 2 Top 20 companies by market value Source: McKinsey Global Institute, Capital IQ, Gartner key metrics data 2012 McKinsey & Company and the McKinsey Global Institute facilitated access to analyses and expertise. SOURCE: McKinsey Global Institute analysis Value chain restructuring Characteristics of vulnerable industries Disintermediation examples Shorten the distance between The majority of venture capital investment is in digital technologies such as big data, artificial intelligence (AI), and financial technology companies. Most transformations fail. In this report, the McKinsey Global Institute assesses the strengths of China’s digital system, the degree of digitization of industries, and the scope for value shift and creation. Much of the recent focus on globalization has been on trade pullbacks, rising protectionist measures, and public hostility. Something went wrong. These demographic trends put a greater onus on productivity growth to propel GDP growth: over the past 50 years, just under half of GDP growth in G-20 countries came from labor-force growth, while productivity growth accounted for the remainder. At the same time, breakthroughs in AI, batteries, and renewables are enabling a more carbon-efficient growth path. These reports introduced the McKinsey Global Institute (MGI) Industry Digitization Index, which 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. 11 & 12 July 2019 The World Conference on Intellectual Capital for Communities -15th Edition - The impact varies by sector 8 SOURCE: McKinsey Global Institute analysis-40% less 80% more Number of hours worked United States and Western Europe, Percentchange in time spent using skill Retai Skill category l Technological skills Higher cognitive skills They can also earn better returns for investors. Its outbound venture capital totaled $38 billion in 2014–16, up from $6 billion in 2011–2013. digitization . These top-decile companies capture 1.6 times more economic profit today compared with 20 years ago, with larger revenues and higher profit margins than in the past. However, many of the jobs expected to be created, such as teachers and nursing aides, typically have lower wage structures. 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. Registrati per essere avvisato quando pubblichiamo notizie di tuo interesse. They are also morphing in some unexpected ways and combining to create even greater impact than we expected. This often occurs because the size of the invested capital base amplifies any decline in the returns to capital relative to the cost of capital. Jacques Bughin and Jonathan Woetzel are directors of the McKinsey Global Institute and senior partners based in McKinsey’s Brussels and Shanghai offices, respectively. 68–73, hbr.org. 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. They improve profit margins three times more rapidly than average and are often the fastest innovators and the disruptors of their sectors. Più 13% nei prossimi dieci anni grazie all'intelligenza artificiale. McKinsey Global Institute. 1 Inclusive application of technology can raise GDP and bring real benefits in traditional areas, such as agriculture, healthcare, and transportation. 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). Other countries with relatively underdeveloped digital infrastructure, innovation and investment capacity, and digital skills risk falling behind their peers. Under the leadership of Marvin Bower, McKinsey expanded into Europe during the 1940s and 1950s.In the 1960s, McKinsey's Fred Gluck—along with … Some digital tools boost top-line growth, and others reduce cost. Inspire. China’s venture capital industry is increasingly focused on digital. We simulated the potential impact of three digital forces in China: We analyzed about 300 use cases in four key sectors that offer different opportunities: consumer and retail, automotive and mobility, healthcare, and freight and logistics. The dynamism of these economies has gone hand in hand with the rise of highly competitive emerging-market companies. We use cookies essential for this site to function well. 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. For the first time in history, emerging economies are counterparts on more than half of global trade flows, and south–south trade is the fastest-growing type of connection. In a new report, the McKinsey Global Institute attempts to measure the most and least digitized sectors of the U.S. economy with the new MGI Industry Digitization Index. November 10, 2017. With low fertility in the developed world, migration has become the primary driver of worldwide population and labor-force growth in key developed regions. Higher requirements for sustainability in industry are forcing companies to rethink how they design and deliver products, services, and projects to increase focus on waste reduction and abatement of carbon emissions. Our mission is to help leaders in multiple sectors develop a deeper understanding of the global economy. 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. 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. Part 2 introduces the MGI Industry Digitization Index for China, which reveals large variations among sectors in terms of their digitization. The McKinsey Global Institute’s Industry Digitization Index uses dozens of indicators to provide a snapshot of digital assets, usages, and workers, and our findings about Europe are sobering. Smaller, globally connected economies, such as Belgium, Singapore, South Korea, and Sweden, also score highly on their ability to foster productive environments where novel business models thrive. Understanding Lighthouses: Characteristics, Differentiators and Success Factors Lighthouse characteristics Injectors of human capital Industry leaders that are resetting benchmarks Open innovators and collaborators Large and small companies From emerging and developed economies In this report, the McKinsey Global Institute assesses the strengths of China’s digital system, the degree of digitization of industries, and the scope for value shift and creation. 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. Reinvent your business. McKinsey Global Institute Industry Digitization Index 2015. 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. This impact is roughly equivalent to the size of the combined Chinese and US economies today. Overall, digitization of industries in China still lags behind that of the United States by a considerable margin, but that gap is narrowing rapidly. 1. Conversely, widespread inefficiencies in China’s sectors and huge opportunities for commercialization mean that those who act boldly can reap considerable rewards. China has become a force to be reckoned with in digital technologies at home and around the world. 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. Some of these shifts will happen within companies and sectors, but many will occur across sectors and even geographies. Press enter to select and open the results on a new page. All economies—both advanced and developing—can learn from the pro-growth agendas across both the public and private sectors put in place by outperforming emerging economies. 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). our use of cookies, and and by several measures, they are already more innovative, nimble, and competitive than Western rivals. 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. 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. Educate. More than 120 of these companies have joined the Fortune Global 500 list since 2000, Consulta la tua bacheca personale e imposta gli alert sulle aree di tuo interesse. FUENTE: Statista; McKinsey Global Institute analysis McKinsey & Company 3 Digital platforms are connecting billions of people across the globe Number of users/accounts in selected digital platforms, 1Q18 or latest available, Millions Global data flows increased 3,500X between 1996 and 2016 By 2020, we expect nearly 1 billion consumers spending But what really is MGI? Finally, automation will likely put pressure on average wages in advanced economies. 2019 has been another highly productive year for the McKinsey Global Institute. At the same time, the world’s exposure to China (the magnitude of flows with China relative to the global economy) has increased since 2000. 2 19 World Bank Global Findex, 2017. 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. Our analysis of more than 400 use cases found that AI could improve on traditional analytics techniques in 69 percent of potential use cases. Jacques Bughin is a director of the McKinsey Global Institute based in Brussels. Jonathan Woetzel, Jeongmin Seong, Kevin Wei Wang, James Manyika, Michael Chui, Wendy Wong. Global value chains are also evolving. Part 3 takes a more detailed look at how three digital forces (disintermediation, disaggregation, and dematerialization) can restructure value chains and increase the magnitude of disruption in four sectors (consumer and retail; automotive and mobility; healthcare; and freight and logistics) and discusses how much scope there is for digitization to shift (and create) value. The developing world is driving global connectedness. The Industry Digitalisation Index (IDI), tracks businesses’ digitalisation progress across sectors, and spans four separate functions of digitalisation in the processes of trade and general business activities. In this article, we offer a closer look at how E&C companies can realize benefits like these. AI spending remains a small fraction of overall digital spending, and many organizations still lack the foundational practices to create value from AI at scale. 3. While cross-border flows of goods and finance have lost momentum, data flows are helping drive global GDP. Today, Europe operates at only an estimated 12 percent of its digital potential, compared with the United States’ 18 percent. We developed scenarios for the impact of automation on the workforce based on the pace and extent of adoption. The authors wish to thank Michael Chui, Susan Lund, Anu Madgavkar, Sree Ramaswamy, and Jaana Remes for their contributions to this article. 1. Learn more about cookies, Opens in new However, McKinsey & Company’s analysis suggests that total digitization of supply chains could stunt revenue growth by 6.8 percent. McKinsey Global Institute, Tackling Europe’s gap in digital and AI, February 2019 Discussion paper McKinsey Global Institute, Applying artificial intelligence for social good , … A Driven Industry McKinsey & Company, Reinventing Construction: A Route to Higher Productivity, 2017 February. The DAI is a worldwide index that measures countries’ digital adoption across three dimensions of the economy: people, government, and business. Earning customer loyalty in a new age. The new MGI Industry Digitization Index for China (using the same methodology as in MGI research on digitization in Europe and the United States) assesses where its sectors stand on digitization relative to each other and reveals that Chinese industries are at very different stages (Exhibit 2). Superstar companies come from all sectors of the global economy, and their diversity has increased over the past 20 years. 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. The industry has recognized the massive productivity gains that can stem from digitization and the application of analytics. McKinsey & Company Type Incorporated partnership Industry Management consulting Founded 1926 ; 94 years ago (1926) Founder James O. McKinsey Headquarters None Area served Worldwide Key people Kevin Sneader (Global Managing Partner) Revenue $10+ billion (2018) Number of employees 27,000 (2018) Website mckinsey.com McKinsey & Company is an American worldwide management … 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). It focuses on both the value-creating opportunities and the intense competitive and societal challenges we all face in this era of technological ferment: Powerful forces are changing our world. Yet AI is not a silver bullet. McKinsey’s Industry Digitiza-tion Index, which combines 27 indicators to measure the digital assets, digital usage, and digital workers in each sector, ranked healthcare near the bottom in 2015 (Exhibit 1).4 The healthcare industry has since been catching up, with CEOs and boards calling for greater digital innovation. 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. In our surveys of companies, about half say they have embedded at least one AI capability into their standard business practices, and another 30 percent are piloting use of AI. Infrastructure is a significant societal investment and a large economic driver. Nevertheless, they can actively embrace digital, offer digital solutions, and become sources of new competition. 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. 1 That means about 45 million people already in the workforce might need to be retrained over the next 11 years. Over the past decade, even as its economy has grown, China’s exposure to the world, as measured by the magnitude of flows of trade, technology, and capital with the rest of the world relative to its economy, has declined. Narrowing the wage gap between immigrant and native workers to 5 to 10 percent, from 20 to 30 percent, through better economic, social, and civic integration would translate into an additional $800 billion to $1 trillion in global annual output. As in other economies, the most digitized sectors in China include information and communications technologies (ICT), media, and finance. Many middle-wage jobs in advanced economies are dominated by highly automatable activities in fields such as manufacturing and accounting, which are likely to decline. Along with the widening economic gaps that might emerge as an unintended consequence of AI deployment, business leaders and governments will need to address other areas of concern, including misuse of AI and data privacy. Our flagship business publication has been defining and informing the senior-management agenda since 1964. AI will also create positive externalities, facilitating more efficient cross-border commerce and enabling expanded use of valuable cross-border data flows. Rekindling inclusive growth so that more people will benefit from future economic growth and global flows will be an imperative. Our flagship business publication has been defining and informing the senior-management agenda since 1964. The Fourth Industrial Revolution: Are We Ready? What will it mean for your company’s strategic agenda? 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. These include steps to boost capital accumulation through industrial policies and savings, deeper connections to the global economy, creation of the impetus for competition, and building of greater competence, agility, and openness to regulatory experimentation in governments themselves. Overall, China’s venture capital sector has grown rapidly, from just $12 billion, or 6 percent of the global total, in 2011–13 to $77 billion, or 19 percent of the worldwide total, in 2014–16. Relatively low . McKinsey Global Institute industry digitization index; 2015 or latest available data Sector Media Finance and insurance Wholesale trade Advanced manufacturing Oil and gas Utilities Basic goods manufacturing Mining Real estate Transportation and warehousing Education Retail trade Entertainment d Personal and local services Government Hospitality hereLearn more about cookies, Opens in new ... we find that sectors highly ranked in MGI’s Industry Digitization Index are also leading AI adopters and have the most ambitious AI-investment plans. Recent research from the McKinsey Global Institute (MGI) looked at the state of digitization in sectors across the U.S. economy and found a large and growing gap between sectors, and between companies within those sectors. The Digital Europe project is a collaborative effort of the World Economic Forum and McKinsey & Company. Workers moving to higher-productivity settings contributed roughly $6.7 trillion, or 9.4 percent, to global GDP in 2015—some $3 trillion more than they would have produced in their origin countries. collaboration with select social media and trusted analytics partners Digital China: Powering the economy to global competitiveness. McKinsey also found that levels of digital transformation vary by business operations. An alternative “best in region” scenario, in which all countries match the rate of improvement of the best-performing country in their region, would add as much as $12 trillion in annual GDP in 2025, equivalent in size to the current GDP of Germany, Japan, and the United Kingdom combined (Exhibit 6). Disruptive technologies, product innovation, and digitization will transform the US building products industry. 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