Shopping malls are like battlefields, and the game between politics and economy has always been an important topic for the development of mankind throughout the ages. If enterprises want to develop in the long run, they must keep up with the trend, gain insight into the market, and seize the development opportunities of high growth and high vitality. The McKinsey Global Institute has identified 18 key areas that will change the business landscape and reshape the global economy through an analysis of the current state and future evolution of the market, which it calls the "Arena". This market research report will provide a brief analysis of the "Main "Arena" of the Future published by the McKinsey Global Institute.
In the report, the McKinsey Global Institute explains what an "arena" is – an industry that changes the business landscape; It has the characteristics of high growth and high vitality. They usually occupy the absolute high ground in economic growth, and the market share of companies in the industry fluctuates dramatically. According to the report, the next 18 arenas could reshape the global economy by 2040 and generate between $29 trillion and $48 trillion in benefits.
Figure: 18 key areas of U.S.-China competition
The main contents of the report are:
There will be 18 future arenas that could reshape the global economy, generating between $29 trillion and $48 trillion in revenue by 2040. These areas range from artificial intelligence software and services, cybersecurity, future air mobility, drugs for obesity and related diseases, robotics to non-medical biotechnology. These future arenas could generate between $2 trillion and $6 trillion in profits by 2040, and their share of global GDP could grow from 4% today to 10%-16%.
After the formation and development of the past 20 years, between 2005 and 2020, there are 12 arenas that shape the current market landscape, including software, semiconductors, consumer Internet, e-commerce, consumer electronics, biopharmaceuticals, industrial electronics, delivery technology, video and audio entertainment, cloud services, electric vehicles, and information-enabled business services. Exceptional growth and dynamics: revenue grew at a CAGR of 10%, market capitalization grew at a CAGR of 16%, and the share of global GDP tripled from 3% to 9%. During the same period, the CAGR of revenue and market capitalization of the non-arena industry was only 4% and 6%, respectively. The report begins by discussing 12 competitive areas that emerged between 2005 and 2020, including cloud services, e-commerce, biopharmaceuticals, and electric vehicles (EVs). The report identifies today's arenas by leveraging a large, customized dataset of the top 3,000 by market capitalization and explores what differentiates these arenas from other industries. McKinsey used 2005 to 2020 as an analysis interval to draw a clear ten-year boundary and ensure consistent, well-rounded data. And the analysis reveals striking differences: in 2005, these areas generated only 9% of the economic profits of our sample, but by 2019, they accounted for 49% of all economic profits of the largest companies.
These significant differences between the existing arena and the general industry provide an important reference for us to understand the rise of the arena in the future. Not only is the arena industry lucrative, it has also given birth to a large number of global giants and provided a rare growth opportunity for new entrants to become among the giants of the industry.
The formation of the arena is often driven by three key elements, prompting industry competition to enter the "accelerated upgrading" mode. These three elements are: leapfrog changes in business models or technologies, large-scale investment races, and huge and growing market space. When these factors are superimposed, in order to compete for market share and product advantages, enterprises often invest huge sums of money to accelerate industry upgrading, thereby further widening the gap with other enterprises and forming a "race to the top".
