Welcome to the latest edition of MGI's Research Update.
Mapping global capital markets
The 2008 financial crisis and worldwide recession halted a three-decade expansion in global capital and banking markets. Today growth has resumed, fueled by expanding developing economies and a $4.4 trillion increase in sovereign debt. This is according to Mapping global capital markets 2011, our latest analysis of the outstanding equity and debt of more than 75 countries, cross-border capital flows, and their stocks of foreign investment assets and liabilities.
Growth and renewal in Europe and the United States
Europe is growing again, but the recovery is uneven and under threat from the continuing eurozone debt crisis. In our updated analysis of the region, European growth and renewal: The path from crisis to recovery, we provide a perspective on where the European economy stands today, the challenges it faces, and the very considerable strengths on which it can build. MGI also sets out seven priorities for action.
Growth and renewal in the United States: Retooling America's economic engine
MGI finds that to match the GDP growth rates of the past 20 years and maintain living standards, the United States needs a 34 percent acceleration in productivity growth—a rate not achieved since the 1960s. Three-quarters of the necessary productivity growth acceleration can come from companies adopting best practice and implementing emerging business and technology innovations. The remaining one-quarter—and more—can come from government and business working together to address barriers that today limit productivity growth.
US jobs and the future of work
In An economy that works: Job creation and America's future, MGI examines the causes for slow job creation in the past decade and in the current recovery. To reach full employment by 2020, the US economy will need to create some 21 million jobs to re-employ the currently unemployed and accommodate new entrants to the labor force. To understand how this might happen, MGI undertook extensive sector analysis, interviewed human resources executives, surveyed 2,000 business leaders, and conducted proprietary scenario analysis and modeling. We offer a series of ideas for setting the stage for job creation that would address growing skills shortages, remove barriers to growth, and encourage greater foreign investment in the United States.
Big data and the economic impact of the Internet
Big data will become a key basis of competition, underpinning new waves of productivity growth, innovation, and consumer value—as long as the right policies and enablers are in place. This is the message of Big data: The next frontier for innovation, competition, and productivity. The report analyzes five domains—health care in the United States, the public sector in Europe, retail in the United States, and global manufacturing and personal location data.
Internet matters: The Net's sweeping impact on growth, jobs, and prosperity was prepared for the e-G8 meeting of technology CEOs and policy makers. The report documents the Internet's significant and growing contribution to global GDP. If it were a separate industrial sector, Internet-related consumption and expenditure would be bigger bigger than agriculture or energy. On average, the Internet contributes 3.4 percent to GDP in the G-8 countries, China, India, Brazil, South Korea, and Sweden—equal to the GDP of Spain or Canada.
Urbanization and growth
Drawing on MGI's Cityscope database of more than 2,000 metropolitan areas around the world, Urban world: Mapping the economic power of cities finds that 600 cities are projected to generate more than 60 percent of global growth through 2025. Within this group, companies need to adjust their strategies to include the 577 fast-growing "middleweight cities" with populations under 10 million. Moreover, nearly half of global growth from 2007 to 2025 will come from 443 emerging region cities, as urban economic power moves south, and even more decisively, east. Middleweights in these regions alone will contribute an estimated 40 percent of global growth.
Building competitive cities: The key to Latin America growth
MGI examines the multiple challenges that Latin America's cities must address to fulfill the region's economic potential and offer an agenda for urban renewal. We find that Latin America is the most urbanized developing region, with 198 cities together contribute more than 60 percent of regional GDP today. Yet Latin America's largest cities are under considerable strain. If their performance doesn't improve, they risk dragging down the region's overall growth trajectory. To sustain growth, urban Latin America needs to emulate best-practice examples at home and around the world.
MGI in the news
Read a selection of op-eds and columns by McKinsey Global Institute experts.