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In the news. With foreign direct investment (FDI), reliance on traditional performance measures—namely, job creation and investment volume—often misrepresents its real economic impact, notes fDi Intelligence. These metrics can obscure other forms of returns, such as knowledge transfer, quality, and sustainability. While the FDI job dividend grew 5.7% over the past 15 years, that average can mask other trends: High-value sectors (such as software and IT) saw job gains, while industrial ones (automotive, for example) saw declines. To address such divergences, investment promotion agencies are adopting more nuanced metrics—such as R&D intensity, patent output, and inclusivity indicators—that better reflect innovation and long-term economic value. [fDi Intelligence]
On McKinsey.com. FDI is experiencing a significant shake-up. A growing share of capital is going toward future-shaping sectors—about 75% of cross-border investment announcements have gone to industries such as AI, energy, and advanced manufacturing, for example—while the geopolitical distance between pledged investments appears to be shrinking. This is especially true among advanced economies and particularly with FDI into the US, say McKinsey Senior Partners Michael Birshan and Olivia White and coauthors. At the same time, China has shifted from being a major FDI recipient to a prominent investor. Explore how these shifts could reshape global supply chains and redraw tomorrow’s maps of trade and competition.Navigate an evolving FDI landscape
In the news. On roadways across China and the US, driverless cars are becoming more common—and less head-turning—than they once were. As Bloomberg reports, several autonomous-vehicle (AV) companies are looking to expand their ridesharing fleets in a range of new markets. One leading company increased its number of completed driverless public rides to 2.2 million in the second quarter of 2025, from 1.4 million in the first quarter. But the process of fully scaling robotaxis is likely to be gradual, given the regulatory considerations, operational costs, and fleet management challenges involved. [Bloomberg]On McKinsey.com. Self-driving cars are reshaping mobility—and, in the process, changing the patterns and norms of people’s everyday lives. In the next 15 years, self-driving cars could be as commonplace as smartphones are now, say Senior Partners Mingyu Guan and Philipp Kampshoff and coauthors. Crucial to widespread adoption will be sustained public trust in AV safety, paired with reduced operating costs enabled by tech advancements. The long-term market potential is substantial. In the latest edition of The Next Normal series, on the future of AVs, McKinsey estimates that autonomous and advanced driver-assistance systems could generate as much as $400 billion in annual revenue by 2035.Prepare for the road ahead
In the news. Few challenges in corporate management are as enduring or as elusive as changing an organization’s culture. As the Financial Times notes, leaders shouldn’t expect widespread transformation through messaging alone. Instead, research shows that when leadership role models behavior that demonstrates buy-in on the changes being made, the rest of the company’s workforce is more inclined to follow suit. Additionally, culture and organizational structure should go hand in hand, says one CEO. With that in mind, the CEO’s own company reduced hierarchy during its transformation and gave employees more ownership over their work. [FT]On McKinsey.com. Operating model transformations are increasingly common, but so are companies’ struggles to fully realize their potential. Only 24% of operating model transformations are highly successful, McKinsey Partner Ákos Légrádi and coauthors find. Most organizations face six common pitfalls that can hinder these transformations, such as neglecting to change culture and leadership, having mismatched targets that aren’t linked to objectives, and not ensuring clarity about broader strategic goals. To get back on track, leaders can conduct a systematic diagnosis of the transformation’s status, maintain transparent communications across the top team, and recognize when big moves are needed to regain traction.Avoid 6 transformation pitfalls
—Edited by Sarah Thuerk, editor, Atlanta
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