ON CREATING SUSTAINABLE AND INCLUSIVE GROWTH

This week’s headline findings

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Just as the First Industrial Revolution was powered by steam, our current Fourth Industrial Revolution (4IR) will be powered by AI. Enabled by the capture of terabytes of data from a broad range of sources, AI can accelerate industrial innovation. Senior partner Enno de Boer and coauthors suggest that organizations at the forefront of 4IR won’t, for instance, run narrow trials to transform factories but will instead use entire factories as pilots for networkwide deployment.

A compelling equity story is necessary to attract capital from large, sophisticated investors. Partners Jamie Koenig, Anna Mattsson, and coauthors detail mistakes companies often make when attempting to convince these investors. To convey a winning equity story, leaders should avoid canned presentations and instead articulate a plan for long-term value creation that’s backed by evidence of tangible steps already taken. It’s important to focus on a limited number of vital themes and make sure they’re contextualized within broader industry trends.

Generative AI (gen AI) could be transformative for American state governments. Gen AI is here now, can be user-friendly, and doesn’t necessarily require an overhaul of existing IT infrastructure. Senior partners Gayatri Shenai, Tim Ward, and coauthors say state governments that seize the gen AI opportunity could be rewarded with improved operational efficiency, better resident experiences, useful insights from existing data sets, and enhanced talent management.

OTHER FINDINGS OF NOTE

WHAT WE’RE READING

A recent edition of Author Talks features organizational psychologist Robert I. Sutton speaking about his new book, The Friction Project: How Smart Leaders Make the Right Things Easier and the Wrong Things Harder (St. Martin’s Press/Macmillan Publishers, January 2024). Sutton explains how leaders can reduce bad friction (that harms productivity) and inject good friction (that prevents, for instance, unethical behavior) into their organizations.

The case study collection Rewired in Action illuminates companies that have launched digital transformations to build value. Supported by technical and industry expertise from McKinsey, these organizations have changed their trajectories through the integration of digital and AI.

In case you missed it

The World Economic Forum’s annual meeting took place in Davos, Switzerland, from January 15 to January 19, 2024. As a strategic partner, McKinsey engaged with leaders from around the globe in dialogue on the world’s most pressing challenges, helping to identify solutions grounded in sustainable, inclusive growth. Explore the themes we focused on by visiting McKinsey’s Davos 2024 overview page.

— Edited by Seth Stevenson, senior editor, New York

About this newsletter

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