Leaders can create conditions for economic growth that supports environmental resilience and advances living standards for more people. Meeting this extraordinary challenge is critical to achieve broad-based prosperity around the world.
As the world economy emerges from the COVID-19 pandemic, leaders have an opportunity to go beyond safeguarding lives and livelihoods to set their sights on a more profound challenge: bettering them. During a McKinsey Live webinar, Asutosh Padhi, managing partner for North America, and McKinsey Global Institute partner Anu Madgavkar shared how stakeholders across the public, private, and social sectors can create the conditions for future economic prosperity by pursuing three imperatives: sustainability, inclusion, and growth. These three deeply connected elements cannot be viewed as trade-offs—they can, and must be, pursued simultaneously.
Success depends on how effectively these key challenges are addressed globally:
- Unlock growth supported by higher productivity. An additional 1.0 to 1.5 percentage points of global GDP per year must be urgently pursued.
- Reduce the transition costs of decarbonization. Technology, innovation, and smart-portfolio choices could reduce the $5 trillion per year of spending that will be required.
- Finance the cost of the energy transition. And do so in a way that doesn’t stifle growth.
- Reskill and re-employ more than 100 million workers in stagnating or shrinking occupations. And energy transitions are likely to displace millions more.
- Make housing, healthcare, education, and energy affordable for all. Countries can strengthen their social contracts by meeting citizens’ basic needs.
- Support the most vulnerable populations. For example, the poorest one-fifth of the global population struggles with access and affordability in areas such as nutrition, water, energy, education, and financial capital.
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For more on this topic, please read the McKinsey Quarterly article “Our future lives and livelihoods: Sustainable and inclusive and growing” and the article “A sustainable, inclusive, and growing future for the United States.”