Chris Bradley, Michael Chui, Kevin Russell, Kweilin Ellingrud, Michael Birshan, Suhayl Chettih
10/1/2024
McKinsey Global Institute
Opinion Pieces
Volume 1, Issue 1
https://doi.org/10.67419/jyi.v1i1.10
Abstract
McKinsey Global Institute researchers define arenas of competition as industries that capture an outsize share of economic growth while market share inside them changes hands at unusually high rates. The report reclassifies the world's 3,000 largest companies by market capitalization into 57 competitive categories and identifies twelve arenas that formed between 2005 and 2020. Those industries grew revenue at a 10 percent compound annual rate against 4 percent elsewhere, and their slice of global economic profit rose from 9 to 49 percent. They were also more open to new entrants and more international than their peers. The authors trace arena formation to three ingredients: a step change in technology or business model, an escalatory pattern of investment, and a large or growing addressable market. Applying the same criteria forward, the report names eighteen candidate arenas that could produce $29 trillion to $48 trillion in revenues by 2040.