McKinsey & Company

We are in a moment of vast potential in life sciences—of diversified investments, breakthrough discoveries, and rapid expansion of therapeutics into new modalities and platforms. And AI is increasingly enabling data-driven decision-making across the product life cycle, from AI-supported drug candidate selection to real-time clinical trial site monitoring. However, overall industry productivity—whether measured in terms of speed, cost-effectiveness, or ROI—has been stagnant for decades. While there are undoubtedly multiple causes…

Amid growing complexities, escalating costs, and a heightened demand for innovative therapies, biopharmaceutical R&D organizations are under pressure to find ways to boost their productivity. Preclinical studies are increasingly using diverse assays, complex “omics” data, and humanized models to evaluate drug candidates. Clinical trials are adopting new trial designs and incorporating personalized-medicine approaches and even more end points. In this challenging environment, pharma leaders are turning to advanced technologies such…

The journey to bring new medicines to market remains long and costly, despite recent technological and process improvements in biopharma R&D. It takes about a decade, on average, from candidate nomination to launch, and study and application costs for investigational new drugs (INDs) have soared in recent years by 20–30 percent.These challenges stem partly from the growing complexity of research and early development, fueled by an explosion of data and…

Brazilian farmers have endured multiple challenges since 2023, including crop failures, commodity price declines, and intensified droughts, rain, and wildfires. The result is greater caution, with two-thirds of producers expecting profits to remain stable or decrease in 2024, according to a McKinsey survey. Rising input costs were Brazilian farmers’ main concern when surveyed two years ago, but now extreme weather events are seen as the biggest threat. And to navigate…

During the past five years, healthcare stakeholders’ expectations of sources of industry growth and profits have shifted toward alternative subsegments. For example, healthcare services and technology (HST) subsegments, which represented about $65 billion in earnings in 2023, will experience an estimated 9 percent CAGR during the next five years. By comparison, payer profit pools (about $55 billion in 2023) will have an estimated 7 percent CAGR during the same period.…

At a glance The ‘empowerment line’ measures progress toward a world where everyone’s essential needs are met. About 40 percent of the global population lives above the empowerment line—they can afford a standard basket of essential goods and services and begin to save. The rest live below the line, mostly in lower- and middle-income economies where GDP growth is the main driver of empowerment. At higher GDP levels, income inequality…

Beauty is no longer in the eye of the beholder; it’s at the fingertips of the generative AI (gen AI) prompter. Gen AI could add $9 billion to $10 billion to the global economy based on its impact on the beauty industry alone, and early movers have already begun testing the technology. But scaling these experiments will be challenging, given the velocity of gen AI innovation. The gap between the…

At the end of 2023, the final McKinsey Talks Operations podcast of the year concluded that there was no such thing as normal for operations leaders. Looking back on the 12 months since then, it seems the sentiment holds true—both everything and nothing has changed. In this episode, hosts Christian Johnson and Daphne Luchtenberg reflect on four recurring themes from their discussions with McKinsey experts and industry guests: building resilient…

Companies in the automotive and industrial sectors are rewiring to become software-enabled enterprises. As in-vehicle software emerges as a critical differentiator, companies have started to reevaluate the role of software and overhaul their development approaches. Today, software serves as the backbone for advanced features and safety-critical functions while enhancing operational efficiency and propelling innovation. But software can also introduce organizational challenges, because underdeveloped software capabilities can result in start-of-production delays…

Self-driving cars once seemed beyond the realm of possibility, but they are now being piloted on city streets. Now another mobility innovation has emerged that could accelerate and complement autonomy: remote driving.By combining sophisticated communication systems with real-time video feeds, remote-driving systems can instantly convey information about road conditions, traffic, and unexpected obstacles to off-site drivers who can control the vehicle’s braking and steering (Exhibit 1). These systems can be…

Over the past two decades, the shift from fixed-function hardware to software-defined hardware has revolutionized industries ranging from networking to mobile communications. With software-defined hardware, developers can improve products and services by continually updating software rather than undertaking more costly and time-consuming hardware upgrades. Devices that were once rigid and task specific are now becoming programmable and flexible, allowing them to handle new tasks and demands. Despite the functional benefits…

Shared autonomous vehicles (AVs) now operate in more than ten cities worldwide, including Beijing, Oslo, Phoenix, and San Francisco. More deployments are planned in other regions as AVs with level four capabilities—those that can handle most functions without human intervention—become increasingly sophisticated. While engineers have overcome many technological hurdles for autonomous mobility and continue to make strides, industry leaders should also address other issues—especially those related to the economics of these…

Economies continue to face a range of geopolitical, climatic, and inflation-led challenges, with some also feeling the effects of structural issues. Against this backdrop, China, India, and the US are outperforming other surveyed economies. Among developed economies, US GDP continues to eclipse European output. Real GDP in the US increased at an annual rate of 2.8% in the third quarter of 2024. In the second quarter, real GDP rose 3.0%.…

Over the past two years, generative AI (gen AI) has been a rapidly evolving trend that has touched the lives of many around the globe. Which is why the design of these formidable systems must include experts from diverse backgrounds, says James Landay, a professor of computer science at Stanford University. On this episode of the At the Edge podcast, Landay talks with McKinsey senior partner Lareina Yee about how to…

Climate change is challenging the limits of traditional insurance by creating new risks and exacerbating old ones at an unprecedented scale. As weather events increase in frequency and severity, many businesses find themselves underinsured or unable to secure coverage. Arbol addresses these growing protection gaps with parametric insurance, which quickly assesses damage based on a predetermined set of markers informed by historical data. In an interview with McKinsey’s Fabian Metzeler,…

Sector Variations in Small Business ProductivityAmerica's small businesses vary widely in productivity across different sectors. While U.S. MSMEs are on par with those in the United Kingdom, Japan, Germany, and Italy in many areas, they lag significantly in mining, transportation and storage, and administrative services. The productivity ratio of MSMEs relative to large companies also varies by sector, with the mining sector facing the widest gap, followed by information and…

Green-steel manufacturing is crucial for the steel industry and the planet, but decarbonizing the global steel production chain is a massive undertaking. Today, the global steel industry is responsible for 7 percent of global greenhouse gas (GHG) emissions. Europe is likely to be the first region to decarbonize, with CO2 taxes and other legislation offering incentives for rapid emissions reductions there. Other regions are likely to follow, driven by similar…

Every business has a best owner, which may—or may not—be your company. But recognizing that it’s time for a separation (which we define as spin-offs, split-offs, carve-outs, and other sales of businesses in a company’s portfolio) and actually executing separations effectively are very different propositions. Successful companies not only understand the separation imperative, but they also anticipate the challenges involved and take practical steps to meet them. As a result,…

As companies across the globe pursue decarbonization targets and the need for green power generation grows, 24/7 clean power purchase agreements (PPAs) are playing an increasingly important role. With their unique ability to provide constant green power, time-matched to demand, these next-level PPAs are helping to unlock investment in nascent technologies and scale their deployment—especially combined with advances in storage and flexible generation. Demand from leading hyperscalers, including major cloud…

New opportunities are coming for organizations to use procurement to gain a competitive edge and drive sustainability impact through innovation and strategic partnerships. However, the complexities of global supply chains and rapidly changing market conditions can make it hard to capture the available value. In this episode of McKinsey Talks Operations, Mauro Erriquez, McKinsey senior partner, and Dominique Lebigot, chief purchasing officer (CPO) of LVMH Wines and Spirits, discuss how…

Battery technology has evolved significantly in recent years. Thirty years ago, when the first lithium ion (Li-ion) cells were commercialized, they mainly included lithium cobalt oxide as cathode material. Numerous other options have emerged since that time. Today’s batteries, including those used in electric vehicles (EVs), generally rely on one of two cathode chemistries: lithium iron phosphate (LFP), which was invented by Nobel Prize winner John Goodenough in the late…

Gilles Dellaert is the global head of Blackstone Credit and Insurance (BXCI), which was created to bring together Blackstone’s corporate credit, asset-based finance, and insurance groups. BXCI now manages more than $350 billion in assets, accounting for the bulk of Blackstone’s total credit assets and a substantial part of the firm’s $1 trillion-plus of assets under management (AUM). McKinsey’s Andrew Reich, Ari Libarikian, and David Schoeman sat down with Dellaert…

Today’s business leaders recognize transformation as the courageous choice required to deliver an ambitious business agenda. As we reported earlier this year, companies pursue transformation to reset the business, venture into areas of greater ambition, deliver bold growth, enable operating-model change, build new and competitive capabilities, and evolve their culture in ways that can set them apart from competitors.What is transformation? We define it as a process that begins with…

From bustling urban centers to small towns across the United States, the economic power and business potential of Latino communities is immense. Today, 19 percent of the US population identifies as Latino or Hispanic. According to the US Census Bureau, Latinos are expected to comprise approximately 28 percent of the total US population by 2060. Latino small-business owners also skew younger, which means there is great promise for long-term value…

In this episode of McKinsey on Building Products, McKinsey partner Rikki Singh speaks with Paul Yacoubian, co-founder and CEO of Copy.ai. They explore how an AI-native company such as Copy.ai leverages product-led growth (PLG), the pivotal role of analytics in the company’s customer outreach strategy, and how start-ups can scale effectively without overexpanding. An edited version of their conversation follows. Background of Copy.ai Rikki Singh: Tell me a bit about…

In just the past few years, a series of unprecedented and fast-moving threats have disrupted organizations. How companies, particularly financial institutions, respond to these complex risks has profound implications. The COVID-19 pandemic wreaked havoc on credit models, and social media has played a leading role in accelerating bank runs to real time. The latter exposed a systemic risk that has required banks to rethink their liquidity and interest rate models.…

Transit agencies in the United States are at an inflection point. Ridership—along with revenue generated from fares—remains, on average, significantly below prepandemic levels. Costs continue to rise as agencies (which manage state and local public-transit systems, including buses, subways, light rail, commuter rail, trolleys, and ferries) pay more to expand services and adopt innovations that are demanded by riders. Aging infrastructure is creating growing maintenance backlogs. Meanwhile, federal subsidies, which…

Mixed-use real estate developments and neighborhoods, where office, retail, and residential property coexist, were growing in popularity well before the COVID-19 pandemic. McKinsey’s research on how the pandemic affected demand for commercial real estate underscores how these areas contribute to resilience, better quality of life, and financial success. Cities with these dynamic spaces saw fewer people fleeing to the suburbs, greater office attendance, and stronger in-store retail than did cities where…

The used-car market has faced unprecedented upheaval in recent years. From 2014 to 2024, prices increased by an average of 3 percent per year. The beginning of the COVID-19 crisis, followed by the supply shock, sent used-car prices soaring, rising by about 50 percent between second quarter 2020 and third quarter 2022. But since late 2022, used-car prices have dropped by 20 percent in several European countries, and there’s significant…

A topic that matters more than ever, and yet is debated more than ever Sustainability matters now more than ever—the increasing need for an urgent step-up in action to meet key climate goals was a common refrain around COP29. Three illustrative facts were often cited: This is the first year we are on track to exceed 1.5 degrees. The costs of climate change are already piling up, global insurance losses…

The emergence of new technologies and geopolitical changes are disrupting industries around the world. Corporations are rethinking how to create value for their customers—whether they are serving other businesses (B2B), consumers (B2C), or both (B2B2C)—and how to rewire their business operations to focus on customer needs. Legacy automotive companies are having to find ways to compete with electric-vehicle disruptors, banks are competing with fintech companies, and consumer goods companies are…

The world’s largest companies increasingly recognize the risks and opportunities presented by nature and natural capital. This awareness is driving more businesses to set specific targets to address their impact on water, biodiversity, forests, and other dimensions of nature. The unprecedented decline of nature and biodiversity underscores the urgency of these commitments. Of the nine planetary boundaries proposed by scientists in 2009 to define a “safe operating space for humanity,”…

In today’s business landscape, organizations face unprecedented levels of change and complexity. Markets shift overnight, new technologies emerge daily, and customer expectations evolve rapidly. This volatile environment demands that organizations adapt quickly, innovate continuously, and respond decisively to new challenges and opportunities. Companies aiming for significant performance improvements may have tried top-down or bottom-up approaches to transformation—either relying on senior management alone or on programs that seek to change employee mindsets.…

Africa’s fintech landscape has undergone a remarkable transformation in recent years, characterized by rapid growth and innovation. Despite significant headwinds, the market remains one of the most dynamic and promising in the world, with notable optimism among fintech leaders and investors. Key fintech players we interviewed indicated they were excited about opportunities across Africa, as reflected by our optimism survey, on which they returned an average score of 4.5, where…

As the suite of technology tools at companies’ fingertips continues its exponential growth, so does the demand for technology’s role in business. Tech transformations are not singular events but rather a constant reality of corporate life. According to our latest McKinsey Global Survey of technology and business leaders, most companies are investing in tech with future growth in mind, and they’re seeing positive results from the transformation work they’ve already done. At…

Throughout his 40-year career, Nathan Bostock has seen the financial services industry change in big ways—and has used these changes to his advantage to usher in the next era of banking. He has led multiple full-scale transformations across several companies, including during his tenure as CFO and CEO of Santander UK and during his time as chief risk officer and CFO of the Royal Bank of Scotland. In this episode…

Like many industries, the upstream sector of the oil and gas industry is facing challenges on several fronts: volatile commodity markets driving higher cost inflation, geopolitical instability causing supply chain disruptions, competition for construction talent and labor in certain geographies such as North America, and increasing pressure to accelerate bringing new production online. Capital expenditure (capex) is rising as a result, calling for cost optimization and innovation in capital deployment…

The healthcare industry has been buffeted by a growing number of challenges over the past few years. This turbulence struck provider organizations in 2022, while payers were initially sheltered from the storm (Exhibit 1). But conditions became more difficult for payers in 2023, which has continued into this year, and there’s limited respite on the horizon. Unlike the widespread challenges the provider and payer sectors have faced, the picture for…

Unexpected crises, volatility, and a generally accelerated pace of change have increasingly become the norm. But it doesn’t feel normal. For many, it feels stressful and exhausting. Think of all the very large disruptions on leaders’ agendas these days—widespread use of automation, artificial intelligence, and other technologies at work; geopolitical and global economic shifts; impacts from climate change; genomic editing and other scientific and bioengineering innovations; social justice trends; and…

The Basel Committee on Banking Supervision (BCBS) issued its standard number 239 (BCBS 239) nearly a dozen years ago in 2013, with the aim of strengthening banks’ risk management through improved risk data aggregation and internal risk reporting. Its binding compliance deadline for global systemically important banks (G-SIBs) was nearly nine years ago, in January 2016. For domestic systemically important banks (D-SIBs), compliance was expected within three years following their…