Context for Global Growth and Development

Context for Global Growth
and Development
Extracts from McKinsey Global Institute research for UN
Session on “Financing for global sustainable development”
James Manyika
November 2014
CONFIDENTIAL AND PROPRIETARY
Any use of this material without specific permission of McKinsey & Company is strictly prohibited
GDP per capita is rising faster and at greater scale than ever before
Population at start
of growth period
Million
Years to double per capita GDP1
Country
Year
1700
United Kingdom
United States
Germany
Japan
South Korea
China
India
1800
1900
2000
9
154
10
53
28
65
48
33
27
10
12
16
1,023
840
1 Time to increase per capita GDP in purchasing power parity (PPP) terms from $1,300 to $2,600.
SOURCE: Angus Maddison; University of Groningen; Resource Revolution: Meeting the world’s energy, materials, food,
and water needs, McKinsey Global Institute, 2011.
Nearly 2 billion people will join the consuming class by 2025
World population, Billion
<1%
3%
7%
13%
23%
23%
36%
53%
Share of population
in consuming class
1.0
1.3
1.6
2.5
3.7
5.3
6.8
7.9
Consuming class
Below consuming class
4.2
2.4
<0.1
1.0
0.9
0.1
1.2
0.1
1.2
0.3
2.2
1.5
2.8
4.0
1820
1870
1900
1950
1970
1990
SOURCE: Homi Kharas; Angus Maddison; McKinsey Global Institute Cityscope 2.0
3.7
4.4
2010
2025
2
By 2025, 600 cities will deliver 2/3rds of global GDP… 440 of them in
emerging countries delivering nearly half of global GDP growth
Contribution to global GDP and GDP growth1
%
Emerging 4402
Other emerging
large cities
GDP, 2010
100% =
$63 trillion RER4
Emerging
small cities
and rural areas
12
36
16
Other
Developed 1603
GDP growth,
2010–25
100% =
$50 trillion RER4
Developed
small cities
and rural areas
5
Other developed
large cities
4
17
13
City
600
Other
14
City
600
12
6
18
SOURCE: McKinsey Global Institute Cityscope 2.0
47
The Internet’s contribution to GDP is already significant
and likely to grow
Internet GDP contribution
% of total GDP, 2010
Aspiring countries
Developed countries
Internet contribution to GDP growth
%, 2004-2009
33.0
6.3
Sweden
22.7
5.4
United Kingdom
16.0
4.6
South Korea
Japan
4.0
United States
3.8
Germany
3.2
India
3.2
France
3.1
Canada
2.7
China
2.6
Italy
1.7
Brazil
1.5
Russia
0.8
N/A
15.0
24.3
5.3
17.6
10.2
Larger than many
sectors including,
agriculture,
utilities etc.
3.4
12.2
2.4
0.9
21% Internet
contribution to
GDP growth in
developed countries
vs. 2.3% aspiring
countries
Mature country average = 3.4
SOURCE: OCDE national accounts, Gartner; Global Insight; OECD; ITU; International Data Corporation; World Health
Organization; ICD; iConsumer US 2010; Euromonitor; H2 Gambling Capital; PhoCusWright; Pyramid Research;
UNESCO; McKinsey Global Institute analysis
Adoption of technology is happening faster than ever
Time to reach 50 million users
38
years
13
years
3
years
Radio
Television
Internet
1
9
88
year
months
Days
Facebook
Twitter
Google+
More Transformational Technologies on the way
Internet, Digitization, Big Data and Analytics, Social Technologies etc
+
IT and how we use it
Mobile
Internet
Cloud
technology
Changing the building blocks
of everything
Internet of
Things
Automation of
knowledge work
Machines working for us
Advanced
robotics
Autonomous and
near-autonomous
vehicles
SOURCE: McKinsey Global Institute analysis
Next-generation
genomics
Advanced
materials
Rethinking energy comes of age
3D printing
Energy
storage
Advanced oil and gas Renewable
exploration and
energy
recovery
6
Global flow of Goods, Services, Finance, People and Data are growing
rapidly, most faster than GDP
Value and growth (%) of cross-border flow
2012 value (CAGR 2000-2012)
Goods
$17.5 trillion
Services
$4.4 trillion
Financial
11%
$4 trillion
People
6%
194 million
people
10%
2%
52%
Data and
communication
21.2 million
megabits/sec
SOURCE: McKinsey Global Institute analysis
7
Goods
Global flows of goods, services, and finance reached
$25.9 trillion in 2012 – and could triple by 2025
Services
Financial
Global flows in goods, services and finance over time
$ trillion
Historical development of global flows
Ratio
over
GDP
24%
23%
29%
Scenarios for global flows in 2025
36%
38%
44%
49%
85
70
50
54
+59
3.3x
44
+28
2.1x
2.4x
36
26
3
5
11
6
1980
1990
2002
SOURCE: IHS Global Insight; McKinsey Global Institute analysis
18
2012
16
13
10
8
13
Slowdown Contiand pro- nuing
tectionism momentum
18
Gaining
momentum
Developed economies and China dominate in knowledge intensive flows
Developed
Total knowledge-intensive inflows and outflows, 20121
Relative area corresponds to the portion of global inflows/outflows
United States
Japan
Emerging
China
United Kingdom
Luxembourg
Hong Kong
(China)
France
119 other
countries
Germany
South Korea
Hungary Mauritius
Sweden
PRT
UKR
PHL
ZAF
SVK
CHL
Malaysia
VNM
FIN
Taiwan
ROM
Mexico
Brazil
ISR
DNK
Russia
NOR
Ireland
Belgium
ARG
Canada
SAU
India
POL
AUT
Spain
AUS
THA
Switzerland
Italy
TUR
Singapore
CZE
Netherlands
1 A knowledge-intensive flow is a flow with embedded information, ideas, or expertise that is transferred when exchanged. Foreign direct investment is
classed as a knowledge-intensive flow because it often entails the transfer of embedded ideas, management expertise, and technology.
SOURCE: Comtrade; IMF Balance of Payments; McKinsey Global Institute analysis
9
Despite opportunities, some important challenges ahead
 Pressure on resources
 After effects of Debt and Deleveraging
 Inclusive Growth and Job Creation
 Growth Challenge and Productivity Imperative
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