2021

The world is richer than it has ever been, but the way in which we create wealth has changed. Should we be using our wealth more productively? Jonathan Woetzel, Anu Madgavkar and Jan Mischke highlight their research findings in Barron's. 

The world's wealth has increased vastly over the past two decades－and nowhere as much as in China. Its share of global net worth was the highest among 10 countries included in MGI’s The Rise and Rise of the Global Balance Sheet report that explores the vitality of the global economy via its balance sheet, write Lola Woetzel and Jan Mischke in China Daily.

The digitized, dematerialized, knowledge-based economy is already here and spreading, and offers huge potential value. The challenge for firms and policymakers is to manage the transition in a way that benefits the many and not just the few, write Eric Hazan, Jonathan Haskel and Stian Westlake in Project Syndicate. 

Asia is the world’s consumption growth engine—miss Asia and you could miss half the global picture, a $10 trillion consumption growth opportunity over the next decade, write Jeongmin Seong and Tiago Devaso in Brookings Future Development blog.

New research by McKinsey Global Institute finds that consumption in Thailand could grow sharply from US$120 billion a year to US$410 billion over the next decade, write Noppamas (Yam) Sivakriskul and Jeongmin Seong in Bangkok Post.

China’s consumption story is evolving. Rising incomes still matter, but the primary feature of the next decade may very well be the impact of sweeping demographic and social change that is coinciding with the rapid march of technology. To find the consumers who will drive China’s growth, you need to look at very different groups of individuals. So who are the consumers who are key to growth? Lola Woetzel and Jeongmin Seong highlight five consumer shifts that matter in China Daily.

Digital finance has many aspects that can improve the workings of emerging economies and further the cause of sustainable development. Open data for finance, where financial data is shared digitally among financial institutions with limited effort or manipulation, is a powerful tool to that end, write Anu Madgavkar and Olivia White in World Economic Forum.

Just when consumers think it’s safe to draw down their pandemic reserve of toilet paper, many are finding stockouts and price increases on other products. Unexpected price increases on a wide range of products raise questions about when consumer product markets will return to normal. Authors Jaana Remes and Sajal Kohli highlight new McKinsey Global Institute analysis in Barron's indicating that the pandemic interrupted a long-term rising trend in the share of services in household consumption, triggering an unexpected spike in demand for products. This may not change anytime soon.

Establishing and expanding digital financial data-sharing systems presents complex technical and regulatory challenges. But secure and trusted schemes also offer a large potential upside for consumers, financial institutions, and the economy, write Anu Madgavkar and Olivia White in Project Syndicate. 

To what extent could open-data ecosystems for finance go beyond greater convenience and easier interactions between financial providers and their customers? Our research suggests that the upside in terms of generating GDP growth is considerable, write Olivia White, Zac Townsend, and Anu Madgavkar in OECD Forum.

Asian consumers are expected to account for half of global consumption growth in the next decade, offering a $10 trillion opportunity. However, the increasing spending power of the region's consumers is not only a story of scale, but also one of diversity and shifting preferences and behaviors caused by powerful demographic, social and economic forces, writes Oliver Tonby in The Korea Times.

Today, Black Americans face stubborn gaps between their economic position and that of white people. Research estimates a $220 billion annual wage disparity versus a parity scenario, with Black workers currently concentrated in low-wage jobs, underrepresented in higher-paying occupations, and paid less than white workers on average within the same occupational categories, especially in managerial and leadership roles. Two initiatives could make a big difference: unblocking pipelines into higher-paying professions and creating pathways to better careers from lower-paying occupations. The authors describe how business leaders can do this to promote Black economic mobility, write Shelley Stewart III, Duwain Pinder, and Michael Chui in Harvard Business Review. 

The definition of intangible assets needs updating to include the knowledge and skills that underpin them. New research shows that companies who invested in these assets are unlocking higher levels of growth. Policymakers can enable economic recovery by helping to define these assets, and by investing in skills and education, write Eric Hazan and Sven Smit in World Economic Forum.

The COVID-19 pandemic has exposed the fragility of global supply chains and highlighted the public health and national security implications of supply chain vulnerability. Policy reactions have focused on limiting exports and encouraging domestic production. But building supply chain resilience will require a more rigorous assessment of risk and a strategic set of policy actions, writes Susan Lund in Georgetown Journal of International Affairs. 

The behavioral changes that persist after the pandemic will offer new business opportunities for firms that carefully assess consumer, industry, and regulatory trends. And policymakers can help the world to boost productivity by extending and improving digital infrastructure and ensuring universal access to it, write Anu Madgavkar and Jaana Remes in Project Syndicate. 

Eliminating racial barriers for Black Americans could initiate a wave of growth, dynamism and productivity, write Shelley Stewart and Michael Chui in CNN Business.

To determine how enduring pandemic-spurred shifts may be, we examined a wide array of behaviors across five countries – China, France, Germany, the United Kingdom, and the United States — using a “stickiness” test that takes into account the preferences of consumers and workers as well as the actions of companies, write Jaana Remes and Anu Madgavkar in Market Watch.

Despite unprecedented challenges, many small to medium-sized businesses (SMBs) around the world have shown remarkable resilience and capacity to reinvent themselves, write Tera Allas, Michael Birshan, Anthony Impey, Charlie Mayfield, Jan Mischke, and Lola Woetzel in Harvard Business Review.

Governments have deployed a staggering amount of public money to support economies during the COVID-19 pandemic, but the path out of the pandemic into recovery and beyond is extremely uncertain. Although economies have proved more resilient than the most pessimistic forecasts, there are very large differences among companies, sectors and countries as well as uncertainty whether this resilience will be sustained. Much depends on choices made by policy makers and business leaders, write Jan Mischke, Eckart Windhagen, and Solveigh Hieronimus in OECD Forum. 

Time is running out for Korea's business leaders who don't have a climate strategy, writes Lola Woetzel in The Korea Times.

There’s a brief window to reduce American dependence on fragile, overseas supply chains for critical products in areas like healthcare, tech and defense—and create new jobs to power the American economy, writes Katy George in Market Watch.

As US factories are struggling to keep up with demand, it’s a now or never moment to make domestic manufacturing more competitive, write Katy George and Eric Chewning in Industry Today.

In McKinsey's latest Global Survey on the economy, executives' views are more positive than they were in March. Globally 73% of respondents believe that conditions in the world economy will improve in the next six months. The share of executives expecting worsening conditions has shrunk by over a half in the past three months, write Sven Smit, Alan FitzGerald, and Vivien Singer in World Economic Forum. 

The future of productivity and economic growth in the US and Europe is uncertain. A trio of economists has reviewed evidence from eight economic sectors to lay out the key conditions for sustained recovery from the COVID-19 crisis. They conclude that the weak productivity growth that followed the Global Crisis can be averted if two conditions are met, write Hans-Helmut Kotz, Jan Mischke, and Sven Smit in World Economic Forum. 

As the greatest economic disruption of this generation, the COVID-19 pandemic also will have a lasting impact – one that may be more varied and divergent than ever before, write Jaana Remes and Sajal Kohli in Project Syndicate.

The future of productivity and economic growth in the US and Europe is uncertain. This column reviews evidence from eight economic sectors to lay out the key conditions for sustained recovery from the Covid-19 crisis. It suggests that the weak productivity growth that followed the Global Crisis can be averted if private and public sectors act together to strengthen demand and diffuse supply-side restructuring to all firms, write Hans-Helmut Kotz, Jan Mischke, and Sven Smit in VoxEU. 

The danger now is that the pandemic-era acceleration of automation and digitalization impedes growth in labor income and consumption, write Laura Tyson and Jan Mischke in Project Syndicate.

Serving the interests of stakeholders, employees, communities and the broader public is not necessarily at odds with the imperative of profit, write Jan Mischke, Lola Woetzel, and Michael Birshan in Milken Institute Review.

The COVID-19 pandemic caused an unprecedented worldwide consumption decline and dramatically changed consumer behavior almost overnight. But what happens once the pandemic is over? Does everything simply return to “normal,” much like flipping a switch? These are questions discussed by Jaana Remes in Brookings. 

A sustained recovery to an economy with full employment and ample “good jobs” will require a significant reallocation of workers from the low-wage, low-skill positions that have been eliminated to new ones requiring higher skills and more training, write Laura Tyson and Susan Lund in Los Angeles Times.

Although some government pandemic-support programs have combined ambitious design with effective delivery, many fall short in one or both areas, write Anu Madgavkar and Olivia White in Project Syndicate.

While the U.S. economy is looking up as growth rates improve and another stimulus package is being explored, hope for a return to pre-pandemic levels of employment for women is still distant. Recent projections based on economic scenarios modeled by McKinsey and Oxford Economics estimate that employment for women may not recover to pre-pandemic levels until 2024—two full years after a recovery for men, write Kweilin Ellingrud and Liz Hilton Segel in Fortune. 

Only by working together can governments, scientists, businesses, and the public unleash the power of biology for good while effectively managing the risks, write Matthias Evers and Michael Chui in Project Syndicate.

Skills development must be available to everyone everywhere throughout their lives, write Lola Woetzel and Jeongmin Seong in China Daily. 

Jamille Bigio, Kweilin Ellingrud, Mekala Krishnan, Anu Madgavkar, and Rachel Vogelstein discuss how to counter the pandemic’s gender-regressive shock in Foreign Affairs. 

The COVID-19 pandemic has increased threats to food security around the world, underscoring the need for innovation to make agriculture and aquaculture more resilient and efficient, write Michael Chui and Matthias Evers in Project Syndicate.

Asia’s rapid emergence as a global technological leader over the last decade is a testament to the power of collaboration, write Lola Woetzel and Jeongmin Seong in Project Syndicate.