McKinsey & Company

Active portfolio management should always be “Plan A.” Corporations that consistently refresh their business mix outperform their peers in TSR by 3.5 percent over the long term, honing their portfolios to develop, acquire, and divest businesses to realize their enterprise strategy. The goal, after all, is not growth for growth’s sake but to maximize returns—which is achieved through a combination of growth and investing capital in an enterprise’s most important…

Decades after the internet’s debut, millions of Americans still lack access to high-speed broadband service. The Broadband Equity, Access, and Deployment Program (BEAD), part of the US government’s 2021 Infrastructure Investment and Jobs Act, provides $42.45 billion in federal funding to expand high-speed internet service across the country. By the end of 2024, all US states will mark an important milestone: they will be in a position to begin their…

Although hard to predict, even in the best of times, the fashion industry is in for a particularly tumultuous and uncertain 2025. A long-feared cyclical slowdown has arrived. Consumers, affected by the recent period of high inflation, are increasingly price sensitive. There is also the surprising rise of dupes, the acceleration of climate change, and the continued reshuffling of global trade. Regional differences, which came into focus in 2024, will…

Renewable energy is booming. Power generation from renewable sources, such as solar and wind, is projected to grow from its current share of about 25 percent of total US generation, to about 45 percent, by 2030. Although this new renewable capacity will help meet net-zero climate policy goals, it’s also contributing to power price volatility—an impact that many energy players didn’t plan for. The intermittent nature of solar and wind…

Power and gas trading is undergoing a transformation. The global trading value pool for these commodities is growing by leaps and bounds. It hit nearly $33 billion in 2023, up 50 percent from the year before. But that’s only part of the story. The rise of renewable energy has introduced greater volatility into gas and power markets, increasing the value of optionality and drawing new market entrants. This is creating unique…

Companies globally are looking to adopt Fourth Industrial Revolution (4IR) technologies to boost both productivity and sustainability. However, the path to success is fraught with challenges, from outdated legacy systems to the critical need for workforce upskilling. In some cases, companies need to overcome an image problem that makes it hard to recruit and retain the talent required to fill vacant production roles.In this episode of McKinsey Talks Operations, host…

Although capital deployment is strongly linked to enterprise value (EV) and financial health, it has always been difficult to manage. The chemical industry is no exception.Our research finds that the chemical industry anticipates annual growth of 3 to 5 percent by 2030, a 4 percent increase in capital expenditures, and the reallocation of significant capital to meet strategic and operational objectives. At the same time, chemical companies have been grappling…

Product portfolios tend to grow. Companies add new products and variants all the time to meet specific customer needs, pursue new market opportunities, or exploit technological advances. They can also be reluctant to kill off older items, for fear of upsetting long-standing customers. Finding the sweet spot in a portfolio is an ongoing challenge. Offer too little choice and customers will choose to play elsewhere, costing the company revenue. Offer…

The demand for oil and gas has returned to prepandemic levels; however, the energy transition is expected to change the demand trajectory for the industry over the medium- to long term. For oil, under all bottom-up scenarios modeled in our recent Global Energy Perspective 2024 report, demand is projected to continue to grow in the short term before plateauing over the next five to seven years and then declining due…

In this episode of McKinsey on Building Products, McKinsey’s podcast on software product management and engineering, McKinsey partner Rikki Singh speaks with Varun Parmar, general manager of Adobe. Throughout his career, Parmar has led product teams at technology companies that are leaders in product-led growth (PLG), such as Box, Miro, and Adobe. Their topics of discussion include how exceptional products drive growth, the importance of reducing the amount of time…

A 3D rendering of light bulb covered with green grass and blooming yellow flowers against light gray backgroundAs with many aspects of modern life, technology has a significant role to play in tackling climate change—arguably the greatest challenge our species has ever faced. But to avoid the most devastating effects of a warming planet, we’ll need to utilize not only the most cutting-edge technological tools but also the natural systems that…

Technology has reshaped banking. Traditional financial institutions have grown their technology teams and are demanding more from them than ever before. Technology teams build innovative new products such as AI-enabled personalized customer experiences, digital payments, and analytics-driven cross-selling. They integrate acquisitions, automate back-office processes, and securely manage vast amounts of data. A look through a bank’s strategy reveals that most of the initiatives require extensive technology delivery. Yet many banks…

Of all the various AI technologies, generative AI (gen AI) has arguably captured the most excitement among organizations in the business world and the public sector. Its ability to automate activities across a range of functions—customer interactions, content generation, and computer coding, for example—promises to reshape how much work gets done and boost performance.McKinsey research has estimated that the application of gen AI to 63 use cases could generate global…

Residential battery energy storage systems (BESS) primarily serve two purposes for homeowners. First, they capture energy generated by solar panels and store it for use when needed, such as in periods of inclement weather or when grid electricity rates increase. Second, they can act as backup generators, providing power during potential outages.In recent years, the European residential BESS manufacturing industry experienced exponential demand growth, fueled partly by consumer desire for…

Mustering adequate human resources for healthcare is a significant challenge for most health systems globally. Everywhere you look, countries are facing shortages in qualified healthcare personnel, uneven distribution of workers, inadequate training, and challenging work environments. These issues are most acute in low- and middle-income countries, particularly in Africa, which carries an estimated 25 percent of the world’s disease burden but accounts for only 3 percent of the global healthcare…

Australia’s general insurers have been facing more frequent and more severe natural disasters, rapid inflation of claims costs, and increased scrutiny from regulators—all while trying to achieve sustainable financial performance. At the same time, the cost of insurance has become increasingly unaffordable for consumers. Insurers trying to outperform in this competitive environment and offer affordable products should look at step-change productivity improvements such as the three levers described in this…

In 2021, we asked whether the private-brand trend would last. At the time, consumers were eagerly snapping up retailers’ owned brands, which were lower-priced and more readily available than similar products from many national brands. Fast-forward to today: our research clearly shows that consumers are continuing to opt for private brands. The trend is continuing in both Europe and the United States. McKinsey’s latest consumer sentiment research shows that nearly 75…

Generative AI (gen AI) promises to transform business processes. The value added from gen AI could reach $ 4.4 trillion per year, according to McKinsey analysis. Historically, the packaging industry has lagged behind other industries in adopting new digital technologies—including traditional AI and machine learning. However, even in this industry, excitement is building around generative AI. We conducted a survey of more than 200 paper and packaging executives across substrates…

Math is wonderful—because it works. Consider a classic valuation question: Is the whole worth the sum of its parts? Put another way, should the total value of a conglomerate be less than the value of its operating companies, if each business were measured on a stand-alone basis? The answer is no, of course not. Two plus two does not equal five, and when it comes to conglomerates, it should not…

A golden outline of a speech bubble is filled with a jumble of colorful, balloon-like spheres. The spheres vary in size, color, and texture, and the image is set against a light-gray background. In recent years, large language models (LLMs) have made tremendous progress in their ability to generate content. But some leaders who hoped these models would increase business efficiency and productivity have been disappointed. Off-the-shelf generative AI (gen…

Hurricanes Helene and Milton wrought destruction as they lashed across the southeastern United States in late September and early October. Lives were lost. Properties were ruined. Amid this devastation, it’s worth noting the considerable toll that storms like these can take on the small businesses that happen to lay in their paths. Small businesses can help knit together the fabric of a community, and many people depend directly on such…

One night, over dinner, Daniel Kahneman changed my perspective on value creation. Why do so many people, including leaders of large corporations, draw back from acting more boldly, even when taking incremental risks can create much greater returns? And perhaps more important: Can anything be done about it? Kahneman explained to me that while it’s hard to change human nature, it’s much easier for organizations to take practical steps to…

The race is on to build sufficient data center capacity to support a massive acceleration in the use of AI. Data center demand has already soared in response to the role data plays in modern lives. But with the emergence of generative AI (gen AI), demand is set to rise even higher. And that is likely to presage a supply deficit. As challenging as this could be, companies and investors…

According to economic historian Dr. Chris Miller, “You can’t understand the modern world without putting chips at the center of the story.” That conviction led Miller, an associate professor at the Fletcher School at Tufts University and nonresident senior fellow at the American Enterprise Institute, to research and write the 2022 nonfiction best seller Chip War: The Fight for the World’s Most Critical Technology. In an interview with McKinsey alumnus…

Private credit has become a more popular financing option across many industries and types of businesses—and the opportunity for investors to deploy this approach is growing. In this episode of Deal Volume, McKinsey’s podcast on private markets, McKinsey partner and host Brian Vickery speaks to Vivek Mathew, president and head of asset management at Antares Capital, one of the world’s largest private credit managers. They discuss how the private credit…

The consumer-packaged-goods (CPG) and retail industries are entering an era marked by a focus on growth and a search for value. The past decade has been particularly challenging, with population growth slowing and consumer attention fragmenting. To respond, companies must push an ambitious dual agenda, as McKinsey outlined in a recent article. They need to find new pockets of growth through portfolio management and enhance capabilities to improve performance. This…

Digitization, rapid advancements in AI technologies, and slower gains in power usage efficiency have significantly escalated the demand for data centers, with major implications for global power market dynamics. In Europe, demand for data centers is expected to grow to approximately 35 gigawatts (GW) by 2030, up from 10 GW today. To meet this new IT load demand, more than $250 to $300 billion of investment will be needed in…

If you have an ambition but no plan behind it, you’re probably not going to get the results you’re looking for. According to recent McKinsey research on the UK economy, the highest-performing UK companies have grounded their ambitions in a set of five conditions—looking at investors, incentives, sources of growth, partnerships, and people. And the results speak for themselves. On today’s episode of The McKinsey Podcast, senior partners Andrew Goodman and Tunde…

This transcript has been lightly edited for clarity.What keeps capital project leaders awake? Ishaan Nangia: What we hear consistently from capital project leaders is that there is a huge amount of value attached to their capital management system. Between 2022 and 2027, about $130 trillion of capital will be spent, and that’s almost a 70 percent increase compared with the previous five years. Our research suggests that most large capital…

Rising uncertainty surrounding future electricity demand could affect Europe’s energy transition and power infrastructure investment plans. Governments and system operators have projected that power demand in major European countries could increase by as much as 7 percent per year to 2030 after two decades of relative stagnation. In McKinsey’s Global Energy Perspective 2024 report, the Continued Momentum scenario projects growth to be only slightly above 2 percent CAGR. Further McKinsey…

At a glance Arenas are a unique category of industries defined by two characteristics: high growth and dynamism. They capture an outsize share of the economy’s growth, and the market shares of players within them change to an outsize degree. We have identified 18 potential arenas of the future that could reshape the global economy, generating $29 trillion to $48 trillion in revenues by 2040. These arenas range from AI…

Brazil is hosting the G20 Summit for the first time this year, a role that will allow it to lead the discussion on critical global issues. High on the agenda at this year’s summit, held in Rio de Janeiro on November 18 and 19, is the challenge of climate change and the capital-intensive energy transition required to reduce greenhouse gas emissions (GHG) that are contributing to it, as agreed in…

Leading a global organization in today’s fragmented world is difficult—perhaps more difficult than ever. Since the outbreak of COVID-19 and the acceleration of geopolitical tensions, leadership teams have faced an increasing number of uncertainties and disruptions. These include the sudden emergence of upending technologies, such as generative AI; the energy transition; and a global workforce seeking more autonomy, empowerment, flexibility, and mobility. There is a compounding and interconnected effect across…

In this episode of The Committed Innovator, McKinsey innovation leader Erik Roth speaks with the founder, president, and medical director of the Child Mind Institute in New York City, Dr. Harold Koplewicz. At a time of increasing concerns globally about child and adolescent mental health, the organization is working to use advanced imaging technologies and AI to help revolutionize diagnosis and treatment of psychiatric illness and psychological and learning disorders.…

Positive news is emerging from various sources, suggesting the global economy might be turning a corner, though substantial risks remain. Central banks face a challenging balancing act between managing inflation and promoting growth, which led to divergent actions this month. Several banks cut rates to boost the economy in September, while others tightened policy to tame inflation. Although headline inflation is approaching central banks’ targets, core inflation remains elevated. The…

The tantalizing vision for global payments has long been that they’d be safe, simple, quick, inexpensive, and ubiquitous. This promise has come closer with each new technological advance. However, instant payments have ushered in the Decoupled Era, a term coined in last year’s Global Payments Report. In this environment, payments are becoming disconnected from accounts, and the number of players is proliferating, fragmenting the value chain, increasing complexity, and endangering…

Over the past decade, the telecom industry has faced one daunting challenge after another. Telcos have endured relentless competitive pressure from fast-moving technology companies that entered their core sectors of communications, connectivity, and data transport. In the hopes of igniting revenue growth, telcos have sought to reinvent themselves. They have created new tech-driven product offerings—from the Internet of Things (IoT) and software as a service (SaaS) to over-the-top (OTT) video…

This transcript has been lightly edited for clarity.What is shifting in tech-enabling operational transformations? This is clearly the age of AI. With the rapid advances in generative AI, it has become very easy to consume AI, and therefore companies are making significant investments over the last few years in the cloud infrastructure across various gen AI technologies, as well as machine learning investments. And there’s an increasing difference between leaders,…

This transcript has been lightly edited for clarity.What is causing so many consumer product leaders to rethink their products and portfolios? Jan Henrich: Renovating and innovating the existing portfolio has never been more important than it is these days. First, consumer discretionary spending is tightening. Second, passing on inflation costs to the consumer is getting more difficult. And last, it is very hard to get a portfolio right the first…

Farmers worldwide are navigating challenges such as increased input prices, extreme weather events, and commodity price volatility. Given the current macroeconomic environment, the priority for farmers today is improving productivity, whether through agriculture technologies (agtech) for improving operations, biological products, or sustainable practices. This report offers insights for organizations collaborating with growers, outlining strategies that could deliver more-personalized products and services to boost productivity and seize emerging opportunities. Since 2018,…