The McKinsey Podcast The industries reshaping our global economy
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Dec 12, 2024 Chris Bradley, director of the McKinsey Global Institute, discusses the transformative forces reshaping the global economy. He introduces the concept of 'wizard' versus 'muggle' industries and explores how new arenas are redefining competitive landscapes. The conversation touches on critical elements for success, like platform establishment and investment dynamics, and highlights the importance of staying agile in markets influenced by rapid technological advancements. Lastly, the evolution of e-commerce reveals stark contrasts between online and offline retail trends.
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Shifting Landscape of Top Companies
- Top 10 companies in 2005 were largely replaced by 2020, with the newcomers being eight times bigger.
- These new companies come from emerging, dynamic, high-growth industries, dubbed "arenas of competition."
Defining Arenas of Competition
- Arenas of competition are defined by high growth and dynamism, measured by value flow and a "shuffle rate."
- These industries account for 45% of market cap growth despite representing only 10% of revenue.
Geographic Distribution of Arenas
- Arenas of competition are geographically concentrated around the Pacific Rim, particularly in the US and Greater China.
- Europe accounts for less than 10% of the value in these arenas, indicating a shift from the Atlantic to the Pacific.