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Brought to you by Alex Panas, global leader of industries, & Becca Coggins, global leader of functional practices and growth platforms
Welcome to the latest edition of Only McKinsey Perspectives. We hope you find our insights useful. Let us know what you think at Alex_Panas@McKinsey.com and Becca_Coggins@McKinsey.com.
—Alex and Becca
In the news. The transition from AI experimentation to value creation is a challenge for many companies, but a focus on measuring AI’s ROI may not be the right solution—at least, not in the short term. A PYMNTS Intelligence study finds that 28% of executives report a “very strong business case” for gen AI. At the same time, the share saying gen AI is “highly effective for improving workflow management” had risen 40% over 18 months—and the share citing gen AI’s high effectiveness in product innovation had grown threefold. The study also discovers that more than 80% of executives anticipate substantial returns from gen AI initiatives within three to ten years, echoing the timelines of previous tech-driven transformations. [PYMNTS]
On McKinsey.com. As companies’ AI adoption continues to increase apace, their ability to scale and capture value from the technology is less consistent. In McKinsey’s most recent research on the state of AI, Senior Partners Alex Singla, Alexander Sukharevsky, and Lareina Yee and coauthors find that most organizations are still in the piloting phase, even as the overall use of AI (including AI agents, which most companies are experimenting with) widens. Read the latest survey report for more about the bold AI ambitions that the highest-performing companies are setting and the business benefits that they have seen.Set an ambitious AI agenda
In the news. Global public debt is at its highest level since 1948 and is likely to rise to as much as 123% of GDP by 2029, according to recent research from an international financial agency. As Reuters notes, the research finds that debt levels in several wealthy economies are already—or are projected to be—above 100% of GDP. Geopolitical tensions, aging populations, rising interest rates, and advancing technologies are all weighing on budgets and increasing the cost of borrowing. One way that countries could bolster GDP growth, according to the research, is by investing in education and the development of human capital. [Reuters]On McKinsey.com. Global wealth has reached a record high of $600 trillion, and it has outpaced GDP since 2000. This has caused the global economy to shift out of balance, share McKinsey Senior Partners Sven Smit and Olivia White and coauthors, as wealth, debt, and cross-border liabilities have grown faster than productive outputs have. In a McKinsey Global Institute report, the authors put forth a “global balance sheet” that points to four scenarios of future growth in the world’s largest economic zones: the United States, Europe, and mainland China. In the best-case scenario, economies could accelerate productivity through growth in several types of assets—for example, technology, public investments, and energy sources.Understand the outlook for wealth and growth
In the news. In Asia, tariff concerns and trade relations are reshaping regional supply chains. The Wall Street Journal reports that purchasing managers indexes hint at divergent trends across Asia: In October, some economies saw a decline in manufacturing activity, while others reported an uptick. The region’s overall economic and trade growth are expected to slow in future quarters due to stricter fiscal measures and fewer exports, one economist says. [WSJ]On McKinsey.com. It’s a unique moment for Asia: Governments and businesses are reassessing their role in the global economy amid shifting trade relations and competitive dynamics. In a conversation with two McKinsey senior advisers, Partner Ziad Haider—McKinsey’s global director of geopolitics—discusses how the region’s supply chains, trade partnerships, and investments are being affected by recent geoeconomic developments. “We find Asian companies are responding to geopolitical uncertainty in two ways: using a microscope to focus on ways to play defense and offense on tariffs, then picking up a telescope to assess the capabilities they will need to navigate a much more volatile world,” Ziad says.See Asia’s shifting economic currents
—Edited by Ramya DRozario, editor, Gurugram
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