Diana Farrell, Terra Terwilliger, and Allen P. Webb

MGI’s research suggests that to foster innovation rather than merely spawn systems that are quickly imitated or promote the wrong goals, companies should focus on two priorities. The first is to identify the productivity levers offering the greatest opportunity for competitive differentiation: targeting the few specific levers that could well create a competitive advantage produces results more reliably than striving for improvement everywhere. The most … [ Read more ]

Sizing the Emerging Global Labor Market

As global labor markets become increasingly integrated, rational action by companies and countries will help facilitate the efficient clearing of supply and demand for jobs.

India’s Lagging Financial System

The country must develop its financial system in order to keep pace with China.

Regulation That’s Good for Competition

Market economies need regulation to facilitate fair competition and to protect consumers, the environment, and vulnerable workers from unfair practices. Too often, however, regulation has the opposite effect: hindering competition and protecting some groups at the expense of others, which is what happens when, for example, minimum-wage regulations limit the creation of jobs for low-skilled workers. A report by the McKinsey Global Institute highlights the … [ Read more ]

The Demographic Deficit: How Aging Will Reduce Global Wealth

The world’s wealthiest countries will need to save more and increase their capital efficiency or they risk lowering their standard of living.

The Economic Impact of an Aging Europe

The aging of European populations will threaten living standards and prosperity.

The Economic Impact of an Aging Japan

The rapid aging of the Japanese population will dramatically reduce savings and wealth-and cut off an important supply of capital to the world.

Mapping the Global Capital Markets

In-depth analysis of the financial assets of more than 100 countries shows that financial markets are becoming deeper, more liquid, and increasingly integrated.

Offshoring and Beyond

Companies that send their back-office jobs offshore often cut their labor costs by as much as half. But new research by the McKinsey Global Institute finds that these companies risk leaving billions of dollars in savings behind if they merely replicate what they do at home in countries where labor is cheap. The savviest operators redesign business processes to exploit automation and take full advantage … [ Read more ]

Who Wins in Offshoring

The savings enjoyed by companies that move labor-intensive service industry work from the United States to countries with lower labor costs have triggered an exodus of US business-processing jobs. Some analysts project that by 2015 roughly 3.3 million of them will have moved abroad. This prospect has prompted calls for the government to restrict offshoring. But they overlook the benefits that accrue to the US … [ Read more ]

Beyond Cheap Labor: Lessons for Developing Economies

The specter of China and it’s massive fleet of low-cost laborers haunts developing economies worldwide. However, for middle-income countries, focusing on cheap labor is not the answer for sustained economic growth, according to The McKinsey Quarterly. Using Mexico as a basis for discussion, this report offers alternative strategies for successful competition. More effective routes to economic development involve transitioning to higher-value-added industries, exploiting comparative advantage, … [ Read more ]

Exploding the myths of offshoring

Far from damaging the economy of the United States, offshoring should enable its companies to direct resources to next-generation technologies and ideas-if public policy doesn’t get in the way.

Editor’s Note: I admit I am not smart enough to fully get my arms around all the issues involved in the debate over offshoring; this article presents one of the strongest and most detailed pro-offshoring (outsourcing) … [ Read more ]

China and India: The race to growth

The contrasting ways in which China and India are developing, and the particular difficulties each still faces, prompt debate about whether one country has a better approach to economic development and will eventually emerge as the stronger. We recently asked three leading experts for their views on the subject. The essays are:

“India’s entrepreneurial advantage” by Tarun Khanna

“China: The best of all possible models” … [ Read more ]

Making Foreign Investment Work for China

The radically different experience of two industries shows that the country needs more competition as well.

Are You Ready to Go Global?

Don’t think of offshoring as just reducing expenses-it’s a great way to generate new revenue. This Harvard Business Review excerpt helps you determine if your company is ready for a global reach.

Getting IT Spending Right This Time

Smart IT investing doesn’t require a return to the spendthrift ways of the late 1990s.