McKinsey: Outperformers: High-growth emerging economies and the companies that propel them

Check out real Mckinsey presentation on high-growth emerging economies and the companies that propel them.

McKinsey: Outperformers: High-growth emerging economies and the companies that propel them

Key Learnings from the Presentation

The McKinsey report, “Outperformers: High-growth emerging economies and the companies that propel them,” provides an in-depth analysis of emerging economies that have shown exceptional growth rates, significantly outpacing advanced economies over extended periods. It identifies key factors that contribute to their success and the role of large companies in driving this growth. Here’s a concise summary capturing the essence and actionable insights from the report:

High-Growth Emerging Economies

• 18 Outperformers were identified, with 11 achieving more than 5% per annum over 20 years, and 7 achieving over 3.5% per annum over 50 years, consistently outpacing US growth.
• Countries like China, India, Vietnam, and Ethiopia have shown remarkable growth rates, distinguishing themselves as recent outperformers.

Factors Behind Outperformance

• Pro-Growth Agenda: The combination of higher productivity, strong and inclusive income growth, and boosted demand underpins the sustained high GDP per capita growth in these economies. Capital accumulation and total factor productivity have been significant growth contributors.
• Pro-Growth Mindsets and Approaches: Successful outperformers have shown agility in government policies, engaged with the private sector to shape growth agendas, and improved bureaucratic capabilities.
• Large Companies as Growth Drivers: In outperforming economies, large companies have had a substantial impact on GDP and value added, significantly more than in non-outperforming economies.

Innovativeness and Global Orientation:

• Top Firms’ Characteristics: Firms in outperforming economies are more innovative, globally oriented, proactive, and nimble compared to their peers in high-income countries, showing greater sales from new products and prioritizing global expansion.

Key Insights from Specific Cases

• Reliance Jio in India and Transsion in Africa are highlighted as companies that have made rapid investments and tailored products to local needs, becoming market leaders in their respective sectors.

Future Growth Opportunities

• The report suggests that emerging economies can increasingly grow trade among themselves, with South-South and China-South trade showing significant increases.
• Automation presents a substantial opportunity for enhancing labor productivity in these economies, potentially driving global growth and increasing their share in global GDP by 2030.

Potential New Wave of Outperformers

• Countries like Côte d’Ivoire, Senegal, Bolivia, and the Dominican Republic, among others, show potential to join the next wave of outperforming economies based on fundamental indicators and recent growth momentum.

About McKinsey

McKinsey & Company stands as a premier entity in the global management consulting sphere, initiated by James O. McKinsey in 1926. Anchored in New York City, this firm has carved a distinguished position in the consulting arena, offering strategic guidance across the globe to a diverse clientele that includes businesses, governments, and various institutions.

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