This week we look at how new technologies are shaping global sustainability trends, and dig into China’s changing chemical industry. Plus, New York Times columnist Thomas Friedman on being optimistic amid so much complexity, and reading picks from Swarna Ramanathan, an associate partner and mobility expert. |
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Last week we delved into how McKinsey experts see the global energy transition unfolding in the coming decades. (In short: less oil, more efficiency.) This week, we’re looking at the related issue of sustainability. Here are just a few of the innovations that are expected to shape new technologies. |
Long-term energy storage. Solar and wind power are ripe with promise, but power has to be stored for when the days are short or the wind doesn’t blow for stretches. Short-term energy storage, such as lithium-ion batteries, often isn’t enough, making long-duration energy storage an important frontier. Several innovators believe they are close to developing new technologies on that front, with one company working on storing renewable energy in molten salt. |
Public electric transport. The rise of electric vehicles (EVs) for personal use isn’t really news anymore. But there’s lots of room to apply EV technology to municipal fleets. In China, 300,000 electric buses hum down city streets every day. European cities are expected to follow suit. Although eBuses have higher acquisition prices thanks to up-front battery costs, their total cost of ownership is lower because they don’t rely on pricey diesel. They also help to reduce emissions, which is great for cities. |
Plastic recycling. Each year, the world generates 260 million tons of plastic waste. Only 16 percent gets recycled. The plastics industry has the opportunity to adopt a circular business model that aims to eliminate waste across sectors while creating economic, societal, and environmental benefits. One promising circular process is pyrolysis, which uses heat and the absence of oxygen to reconvert plastic waste back into liquid feedstock. The benefits are economic as much as environmental—with a recycling-based profit pool estimated at $55 billion by the next decade. |
Hydrogen’s future. If we want to reduce carbon dioxide emissions by 60 percent, hydrogen should be part of the solution. Although battery-powered EVs are more fuel efficient, hydrogen-powered fuel cells can store more energy with less weight. This makes them ideal for long-haul, heavy-cargo vehicles. Hydrogen-powered fuel-cell vehicles are already on the roads in California, Germany, Japan, and South Korea—and more than ten new models are slated for release by 2020. |
For more, check out McKinsey’s new Sustainability blog. |
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OFF THE CHARTS |
A new era for China’s chemical industry |
The largest in the world by revenue since 2011, China’s chemical industry is growing faster than other major chemical-producing regions. But pressure on financing and tighter environmental regulations mean a trend toward consolidation is likely. Here’s why it matters. |
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INTERVIEW |
The world’s gone from fast, to flat, to deep |
Thomas L. Friedman, the New York Times foreign-affairs columnist and Pulitzer Prize winner, recently sat down with McKinsey Global Institute chairman James Manyika to discuss the impact of connectivity, globalization, digitization, and artificial intelligence on work, skills, incomes, and prosperity—perfect meaty weekend fare. And if you prefer a lighter snack, here’s Friedman on lifting people back into the middle class and why he’s optimistic. |
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MORE ON MCKINSEY.COM |
How to operate like a tech company | To stay ahead of digital disruptors, companies need to create cross-functional platform teams. Take these four actions to make the required organizational and operational changes. |
For cost savings, try adding zero | Companies often believe they have extracted all significant cost savings from their supply chain. But a zero-based approach might prompt a rethink. |
Don’t cry over spilt milk | Dairy is ubiquitous in many countries, but consumer tastes are changing, and there’s more competition. Four strategies can help dairy companies grow despite these trends. |
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WHAT WE’RE READING
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Swarna Ramanathan |
Swarna Ramanathan, an associate partner in London, works in McKinsey’s Operations and Automotive & Assembly practices. She focuses on mobility, connectivity, and energy storage in rapidly growing urban environments.
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One book that influenced me in a profound way is Shatila Stories, a work of collaborative fiction by nine refugee writers about the Beirut camp where they live. Most of the three men and six women arrived from Syria over the past five years, but several are second- and third-generation Palestinian refugees born in the camp. Their stories remind us not to take anything for granted in our own lives. I often find myself thinking about the children in the camp. |
Start-Up Nation: The Story of Israel’s Economic Miracle by Dan Senor and Saul Singer is a different kind of book but no less interesting. It examines how a small country with no natural resources can produce more start-ups than many large nations. |
Emotional Intelligence: Why It Can Matter More Than IQ by Daniel Goleman educated me about how emotions play a major role in our thinking, decision making, and individual success. It’s a fascinating book, based on research into the brain and behavior, with plenty of practical tips on how to be more emotionally intelligent and self-aware. I have also seen its impact in daily life—at work, with kids, in relationships. |
Sheryl Sandberg’s famous book and exhortation, Lean In, is an enjoyable read that I relate to very well. The “myth of doing it all” rings so true. I cannot do it all—two children, a household, a dual-career home—without making trade-offs. I have been frank about my limits to my children and to my work. |
Another relatable Sandberg principle is “don’t leave before you leave.” I’ve seen so many female friends and relatives forgo career advancement when they didn’t have to. The book explains how employees should be comfortable taking new roles or responsibilities even when they are about to have a child. Something to think about. |
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BACKTALK |
Have feedback or other ideas? We’d love to hear from you. |
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