McKinsey Global Institute 2025 in Charts: AI, Trade, Productivity, and Global Economic Trends

MGI 2025: A New Era in Global Economics

The McKinsey Global Institute‘s annual “Year in Charts” report has become one of the most anticipated publications in global economics, distilling the research organization’s most significant findings into data-driven visualizations that capture the year’s defining trends. The 2025 edition arrives with a striking declaration: “In 2025, we are no longer on the cusp of a new era, but truly in it.”

Organized around five core research themes—productivity and prosperity, global connections, technology and markets of the future, resources of the world, and human potential—the report presents 14 original charts that illuminate the forces reshaping the global economy. From the concentration of productivity gains in a tiny fraction of firms to the half-speed progress of the energy transition, the data reveal an economic landscape characterized by profound concentration, rapid technological transformation, and persistent inequality.

What distinguishes the 2025 edition from its predecessors is the convergence of multiple structural shifts reaching critical mass simultaneously. AI automation potential, geopolitical trade reconfiguration, demographic headwinds, and climate adaptation pressures are no longer emerging trends but active forces reshaping business strategy and policy frameworks. For decision-makers across sectors, these charts provide the quantitative foundation for understanding where the global economy stands and where it’s heading, complementing detailed analyses like the WTO’s comprehensive study of how AI reshapes global trade.

The Power of Standout Firms in Productivity Growth

One of the report’s most consequential findings concerns the extraordinary concentration of productivity growth. Analyzing 8,300 large firms across three countries, MGI discovers that just 2% of firms—fewer than approximately 100 companies—account for 63% of national positive productivity growth. These “Standout” firms drive the majority of economic advancement not through gradual efficiency improvements but through bold strategic moves, aggressive top-line growth, and transformative portfolio shifts.

The research characterizes productivity progress as “a few firms moving a mile rather than many firms moving an inch.” This concentration pattern is dynamic and sporadic: standout firms don’t maintain their positions indefinitely, and new entrants can emerge rapidly. The implication is profound—national productivity performance depends less on broad-based improvement programs and more on creating conditions that enable a small number of firms to make outsized contributions through innovation and strategic boldness.

For policymakers, this finding challenges traditional approaches to productivity enhancement that focus on raising the average performance of all firms. Instead, the data suggest that economic policy should focus on removing barriers to bold strategic action, enabling rapid scaling of successful business models, and ensuring that the conditions exist for standout firms to emerge across all sectors and regions. For business leaders, the message is equally clear: incremental improvement is insufficient for meaningful productivity impact.

Global Household Wealth: Real Growth vs. Paper Wealth

The report’s analysis of global household wealth reveals a troubling disconnect between financial markets and the real economy. Global household net worth grew from $136 trillion in 2000 to $539 trillion in 2024—a gain of approximately $400 trillion. However, only about $100 trillion of this growth represents cumulative net domestic investment. The remaining three-quarters of the increase came from general inflation ($156 trillion) and additional asset price dynamics ($146 trillion), which MGI classifies as “paper wealth” not backed by proportional real economic growth.

This 36% share of growth attributable to asset price appreciation beyond inflation raises fundamental questions about the sustainability of current wealth levels and the distribution of economic benefits. When wealth grows primarily through rising asset prices rather than productive investment, the gains accrue disproportionately to those who already own assets, widening inequality. The pattern also creates vulnerability to corrections if asset prices return to levels more aligned with underlying economic fundamentals.

The implications extend to retirement planning, fiscal policy, and financial stability. Governments and individuals relying on continued asset price appreciation for future security may find their expectations unmet if the paper wealth component proves unsustainable. For investors and financial planners, the data provide a sobering reality check: distinguishing between real economic value creation and paper wealth dynamics is essential for sound long-term decision-making.

Geometry of Global Trade and Geopolitical Shifts

MGI introduces an innovative three-dimensional framework for understanding trade reconfiguration. Between 2017 and 2024, the geographic distance of trade increased by just 1% to approximately 5,300 kilometers, reflecting a slow but steady lengthening of supply chains. More significantly, the geopolitical distance of trade decreased by 7%, falling from approximately 3.5 to 3.2 on a 0-10 scale, indicating that countries are increasingly trading with geopolitically aligned partners rather than across geopolitical divides.

Import concentration, measured by the Herfindahl-Hirschman Index, increased by just 2%, remaining broadly stable at around 1,600. This suggests that while the composition of trading partners is shifting, the overall degree of import diversification has not changed dramatically. China, Germany, and the United States experienced the sharpest reductions in the geopolitical distance of their trade, reflecting the reorganization driven by US-China tensions and Russia’s invasion of Ukraine.

The “Rearrangement Ratio”—a new MGI metric quantifying the difficulty of shifting US imports from China to alternative suppliers—provides granular insight into trade vulnerability. Thirty-five percent of US imports from China have a low rearrangement ratio (easy to shift), including cotton textiles and logic chips. However, 5% of trade is essentially impossible to rearrange, including rare earth magnets and certain consumer electronics. Consumer goods are significantly harder to rearrange than business inputs: only 16% of consumer goods have low ratios compared to 61% of business inputs.

Semiconductor FDI and Supply Chain Restructuring

The semiconductor sector exemplifies the broader geopolitical restructuring of global supply chains. Between the 2015-2019 and 2022-2025 periods, the geography of semiconductor foreign direct investment shifted dramatically. The United States became the largest recipient of announced investment, with 90% of inflows coming from South Korea and Taiwan. Mainland China’s annual inflows fell approximately 80% compared to the earlier period, while Europe received under 15% of all announced investment.

If successful, the announced FDI could more than quadruple battery manufacturing capacity outside China, nearly double global data center capacity for AI workloads, and draw the United States into the ranks of top leading-edge semiconductor-producing nations. These are not incremental adjustments but structural transformations of global industrial geography, driven by a combination of security concerns, industrial policy incentives, and technology competition. Three-quarters of cross-border FDI announcements since 2022 have targeted future-shaping industries, up from approximately half before 2020.

The semiconductor restructuring carries significant implications for global technology competition, supply chain resilience, and regional economic development. India and Southeast Asia are attracting increasing investment for non-leading-edge semiconductor nodes, while new recipients like Vietnam, Saudi Arabia, and the Czech Republic are entering the semiconductor value chain. This diversification reduces concentration risk but creates new dependencies and coordination challenges that will take years to resolve, themes explored in our analysis of how technology leadership is evolving globally.

AI Agents, Robots, and the Future of Work

The report’s workforce analysis provides the most comprehensive data yet on AI’s automation potential. Of total US work hours, 57% are technically automatable, while 43% require capabilities that current technology cannot replicate. AI-powered agents could perform tasks occupying 44% of work hours, primarily involving nonphysical cognitive activities. Robots could handle the remaining 13%, focused on physical tasks. By 2030, people-agent-robot partnerships could unlock approximately $2.9 trillion in economic value in the United States alone.

The analysis reveals important nuances about which human capabilities remain essential. Approximately 65% of activities require only nonphysical capabilities, while 35% require physical capabilities. More than 70% of human skills apply in both automatable and non-automatable work, suggesting that the transition will be one of augmentation and reallocation rather than wholesale replacement. Social and emotional capabilities remain particularly important for non-automatable work, required in 15% of human-performed tasks but only 1-8% of tasks suitable for agents or robots.

These findings have profound implications for workforce strategy, education policy, and economic planning. Organizations must prepare for a world where human-AI collaboration becomes the norm rather than the exception, investing in the social, emotional, and creative capabilities that differentiate human contribution from automated execution. For policymakers, the data reinforce the urgency of reskilling programs and educational reform to prepare workers for roles that complement rather than compete with AI capabilities, a theme explored in OECD strategies for building an AI-ready workforce.

The $26.8 Trillion Industrial Reshuffling

The reshuffling of the world’s most valuable companies between 2005 and 2025 illustrates the speed and magnitude of industrial transformation. In 2005, the top 10 companies by market capitalization—led by General Electric ($370B), ExxonMobil ($350B), and Microsoft ($278B)—had a combined value of $2.42 trillion. By 2025, the top 10—led by Nvidia ($5.03T), Apple ($3.98T), and Microsoft ($3.84T)—are worth $26.8 trillion, an 11-fold increase.

Only one company, Microsoft, appears on both lists. The 2005 cohort was dominated by energy companies (ExxonMobil, BP, Shell), financial institutions (Citi, Bank of America, HSBC), and industrial conglomerates (General Electric, Walmart, Johnson & Johnson). The 2025 leaders are overwhelmingly technology companies with strong positions in AI, cloud computing, semiconductors, and digital platforms. Nvidia’s position at the top, worth more than the entire 2005 top 10 combined, reflects the extraordinary value creation driven by AI infrastructure demand.

This industrial reshuffling demonstrates what MGI calls the “arenas” effect: high-growth competitive domains where outsized rewards flow to a small number of winners while losers face rapid displacement. For investors and strategic planners, the data underscore the importance of identifying and positioning within emerging arenas rather than extrapolating from past industrial structures. The 20-year transformation also highlights the impermanence of market leadership, even for companies that appear dominant in their era.

Energy Transition: Progress at Half Speed

The report’s assessment of energy transition progress delivers a sobering verdict: the global deployment of low-emissions technologies is advancing at approximately half the pace required to meet Paris-aligned 2050 targets. By the end of 2024, 13.5% of required technologies had been deployed, representing about 3 percentage points of progress in two years. However, the “cruising speed” benchmark would require 17% deployment by this point, putting actual progress 3.5 points behind schedule.

The sector-by-sector analysis reveals significant variation. Power generation and mobility (electric vehicles) are advancing, with EV stock reaching 6% of the required target. Raw materials for the transition, particularly critical minerals, have actually exceeded their 2024 target at 40% deployment versus a 44% target. Buildings (heat pumps) are progressing steadily. However, critical sectors remain mostly stuck: carbon capture stands at just 1% versus a 8% target, hydrogen and energy carriers remain at essentially 0% versus 7%, and heavy industry (steel and cement) shows no meaningful progress at 10% versus 16%.

Climate adaptation costs add another dimension to the challenge. Current global spending on weather defense is approximately $190 billion annually. At 2°C warming, projected around 2050 on current trajectories, achieving developed-economy protection standards globally would require approximately $1.2 trillion annually—a six-fold increase. Heat stress accounts for 49% of projected adaptation costs, with air conditioning alone representing 38% of the total. The benefits of adaptation investment outweigh costs by a ratio of 7 to 1, making a compelling economic case for accelerated spending.

Demographic Waves and the Falling Fertility Challenge

The report identifies global demographics as one of the most consequential structural challenges facing the world economy. Working-age population is declining in three successive waves: developed economies and Greater China have already peaked (around 2010-2015), emerging Asia, India, Latin America, and MENA will peak between 2030 and 2040, and sub-Saharan Africa (where the fertility rate remains 4.4) will continue growing well into the second half of the century.

The demographic challenge is compounded by the long lead times involved: a baby born today will not enter the workforce for approximately 20 years, meaning that birth rate changes have no near-term impact on labor supply. Critically, no country has been very successful at reversing fertility decline once it begins. This reality forces attention toward three alternative levers for maintaining economic growth: increasing employment rates (particularly among women and older workers), accelerating productivity growth (which AI may help enable), and facilitating effective migration.

MGI emphasizes that these levers must be used in combination rather than in isolation. Countries that rely solely on productivity growth without addressing labor supply face mounting pressure from aging-related fiscal costs. Those that attract immigration without integrating workers effectively miss potential productivity benefits. The demographic data suggest that the most successful economies of the next quarter-century will be those that simultaneously optimize across all three dimensions, as explored in WHO’s comprehensive analysis of global health and demographic trends.

Gender Pay Gap, Empowerment, and Human Potential

The final theme addresses human potential through two powerful analyses. The gender pay gap data show that by year 10 of their careers, women earn 27% less than men ($76,000 versus $104,000). Approximately 80% of this gap is attributable to what MGI calls the “work-experience pay gap”: career pathway differences account for 53% of the gap (14 percentage points), differences in hours worked account for 26% (7 percentage points), and residual factors account for 21% (6 percentage points). Over a 30-year career, the cumulative impact reaches approximately $500,000 in lost earnings per woman.

The “Empowerment Line” analysis measures whether populations can afford a basket of essential goods and services for a decent quality of life across nine dimensions: working-age population, labor participation, job opportunities, stable employment, housing, food, transportation, healthcare, and education. The results reveal stark global disparities: 78% of the population across 36 higher-income economies meets the empowerment threshold, but this drops to 49% in 40 middle-income economies and just 23% in 44 lower-income economies. India, with 1.42 billion people, has only 29% empowerment, while the United States at 79% still leaves roughly one in five Americans below the threshold.

These human potential metrics underscore that economic growth, while necessary, is insufficient for broad-based prosperity. The specific barriers to empowerment vary dramatically by country: housing affordability dominates in wealthy nations like the United States, job availability constrains middle-income economies like South Africa, and food security remains the primary challenge in lower-income countries. MGI concludes that the private sector is pivotal to achieving empowerment, creating a direct link between business strategy and social outcomes that transcends traditional corporate social responsibility frameworks.