AI to obesity drugs: McKinsey identifies 18 sectors for next wave of global growth
Where can global growth come from in the next 15 years? This is a crucial question not only for industrialists and investors, who would directly channelise their money and skill pool towards such sectors but also for governments and economic policymakers who would try to incentivise the proliferation of these sectors in the economy.
Kolkata: Where can growth come from? Growth worshippers from industrialists to government to economists to policymakers are all in search of growth areas of the future. Global management consultancy firm McKinsey has identified 18 industries which could generate $29-48 trillion in annual revenue by 2040. Let's have a look at what these are and which are the areas where India can profit from.
While drawing up this chart, the consultancy firm has focussed on exceptional growth. It has found that e-commerce can expand to represent the biggest growth sector in the world. McKinsey has also noted how e-commerce revenues jumped from $15 billion in 2005 to more than $1 trillion in 2023.
18-34% of global growth
McKinsey has highlighted breathtaking numbers to underscore the potential of these following sectors. It has said, "The 18 future arenas could generate $29-$48 trillion in revenues, or 18-34 percent of total GDP growth." An interesting mention in this list is that of autonomous vehicles, which are self-driving or driverless cars. Another in drugs for obesity and related conditions.
E-commerce
Revenue in 2022: 4,000
Revenue in 2040 (estimate): 14,000-20,000
CAGR, 2022-40: 7-9%
Al software and services
Revenue in 2022: 85
Revenue in 2040 (estimate): 1,500-4,600
CAGR, 2022-40: 17-25%
Cloud services
Revenue in 2022: 220
Revenue in 2040 (estimate): 1,600-3,400
CAGR, 2022-40: 12-17%
Electric vehicles
Revenue in 2022: 450
Revenue in 2040 (estimate): 2,500-3,200
CAGR, 2022-40: 10-12%
Digital advertisements
Revenue in 2022: 520
Revenue in 2040 (estimate): 2,100-2,900
CAGR, 2022-40: 8-10%
Semiconductors
Revenue in 2022: 630
Revenue in 2040 (estimate): 1,700-2,400
CAGR, 2022-40: 6-8%
Shared autonomous vehicles
Revenue in 2022: n/a
Revenue in 2040 (estimate): 610-2,300
Space
Revenue in 2022: 300
Revenue in 2040 (estimate): 960-1,600
CAGR, 2022-40: 7-10%
Cybersecurity
Revenue in 2022: 160
Revenue in 2040 (estimate): 590-1,200
CAGR, 2022-40: 8-12%
Batteries
Revenue in 2022: 98
Revenue in 2040 (estimate): 810-1,100
CAGR, 2022-40: 12-14%
Modular construction
Revenue in 2022: 180
Revenue in 2040 (estimate): 540-1,100
CAGR, 2022-40: 6-10%
Streaming video
Revenue in 2022: 160
Revenue in 2040 (estimate): 510-1,000
CAGR, 2022-40: 6-11%
Video games
Revenue in 2022: 230
Revenue in 2040 (estimate): 550-910
CAGR, 2022-40: 5-8%
Robotics
Revenue in 2022: 21
Revenue in 2040 (estimate): 190-910
CAGR, 2022-40: 13-23%
Industrial and consumer biotech
Revenue in 2022: 140
Revenue in 2040 (estimate): 340-900
CAGR, 2022-40: 5-11%
Future air mobility
Revenue in 2022: n/a
Revenue in 2040 (estimate): 75-340
Drugs for obesity and related conditions
Revenue in 2022: 24
Revenue in 2040 (estimate): 120-280
CAGR, 2022-40: 9-15%
Nuclear fission power plants
Revenue in 2022: 18
Revenue in 2040 (estimate): 65-150
CAGR, 2022-40: 7-13%
(Note: The amounts are in $ billions)
(Source: Company annual reports; McKinsey Value Intelligence; McKinsey Global Institute analysis)
The 2024 study
McKinsey had done such a study in 2024 too, when it detected 12 industries on the basis of high growth and dynamism, which included cloud services, e-commerce, biopharmaceuticals and electric vehicles. "This dynamic dozen more than doubled their revenue share between 2005 and 2023 and grew their market capitalization by 14 percent per year, compared with 5 percent for the 45 other (non-arena) industries analyzed. The 12 arenas saw more new entrants, much higher R&D investment, and greater economic profits, too. At the root of their growing success, we found an "arena-creation potion” with three main ingredients: a technology or business model breakthrough, an escalatory race with ever-larger investments, and an addressable market that enables global scale and is large, growing, or both," McKinsey stated in its report.