Growth

The past 50 years was a period of exceptionally rapid economic expansion. Average per capita income almost tripled, and the global economy expanded sixfold in GDP terms. But the long-term growth outlook is extremely uncertain. Some observers raise the issue of challenging demographics; they talk about “secular stagnation” and express doubts about whether future growth can match its rapid upward trajectory of recent decades. Others point to the transformative impact of technology and paint a more optimistic picture. The debate about growth goes even deeper and broader than this. Many question whether—and how—growth can be sustainable and inclusive. There is a lively discussion about whether GDP is the right measure of growth. Amid such debate, it is difficult for policy makers and businesses to respond effectively.

In this report, the McKinsey Global Institute (MGI), which has studied growth in 30 industries in more than 20 countries over the past 25 years, reviews patterns of global growth over the past half century, focusing on the two key drivers of that growth—labor and productivity. Our broad finding is that, in the face of declining population growth that is putting pressure on the pool of available labor, the rate of GDP growth is set to be 40 percent lower than its rate over the past 50 years. To compensate fully for weakening labor growth would require productivity growth to accelerate by 80 percent from its historical rate. Drawing on five detailed sector case studies, we find that it is possible—but extremely challenging—to boost productivity growth by this margin. However, aggressive action would be needed to enhance competitiveness, harness technology, mobilize labor and further open up and integrate the world economy. Collectively, we need to engage in a frank conversation about the tough trade-offs that such action would entail.

With many companies making strategic business decisions over long time frames, the long-term projections of The Economist Intelligence Unit (EIU) provide information to facilitate such decisions. Long-term forecasts and scenarios are also key to understanding some of the big economic issues that will shape global business in the coming decades. The EIU has an established methodology for producing long-term economic forecasts for 82 economies. We have recently completed an extension of our forecast horizon to 2050, and below we consider some of the key trends that are highlighted by these extended forecasts.

Call it an American consensus: India now matters to U.S. interests in virtually every dimension. India’s economy is a fast-growing emerging market, increasingly important for international business, and Indian businesses have become investors in the United States. Geopolitically, India’s growing military capabilities can help protect the sea lanes and deliver humanitarian assistance quickly throughout the South Asian region, and increasingly across the greater Indo-Pacific. India’s long-standing stability anchors the volatile Indian Ocean region and helps ensure that no single power dominates the Asia Pacific, leading to a stable balance of power. India’s sheer scale means that complex global challenges, such as climate change, cybersecurity, and health, cannot be solved without it. Additionally, India’s diverse, plural democracy stands out in a world in which authoritarianism poses new threats to the interests of the United States and its allies.
Today, India has a window of opportunity for significant change. There are two Indias, one that appears poised for global success, and one that continues to struggle with weighty economic, social, and developmental challenges. Both exist at the same time—but against the backdrop of slowing global growth, India has a greater chance to stand out. With Prime Minister Narendra Modi elected to office on a campaign focused on job creation and economic growth rather than the welfarism of the past, India may at last be able to translate its long-heralded power potential into reality.

The industrial structure of European economies and the types of occupation that they support are changing. This change takes many forms in different national contexts, but there are some common themes. There has been an increase in service-sector employment, both in low-skilled customer service work and in high-skilled ‘knowledge’ occupations, and a corresponding drop in manufacturing employment. This has contributed to a ‘polarisation’ of the workforce in many countries, with more high-skill and low-skill jobs but fewer requiring mid-level skills. At the same time, young people are finding it increasingly hard to get a foothold in the labour market, and the proportion of the workforce employed on full-time, permanent contracts has shrunk.

Some of the changes are cyclical, the result of recession followed by a stuttering recovery. The rise in temporary work, for example, might be expected to recede when European economies are again growing strongly enough to bring unemployment down towards its pre-recession level. Other changes, however, are the result of major structural forces operating in the global economy: the rapid pace of technological innovation, globalisation and demographic change. These forces are likely to continue to cause dislocation and disruption in European labour markets for the foreseeable future. As a result, there will be a fundamental shift in the types of jobs that are available for workers and in the skills demanded by employers across Europe. Understanding the likely changes in the European labour market over the next decade is essential if policymakers and firms are to set Europe onto a path towards permanently lower unemployment through the creation of many more well-paid jobs.

This paper depicts the medium to long term development prospects for the African livestock sector by reviewing data on the estimated consumption of animal-sourced foods and anticipated responses by producers for 2005/07, 2030 and 2050. Data and projections are elaborated by the FAO Global Perspective Studies Unit.
Increases in the demand for animal-sourced food are estimated extraordinarily high in Africa over the coming decades. By 2050, the meat market is projected at 34.8 million tonnes and that of milk about 82.6 million tonnes, an increase of 145 and 155 percent respectively over 2005/07 levels. More notably, over this period, Africa’s increase in volume of meat consumed will be on a par with that of the developed world and that of Latin America, with only South Asia and Southeast Asia anticipated to register higher growth. For milk, only South Asia will register stronger gains in market size than Africa. Furthermore, annual growth rates in both meat and milk consumption are projected to be higher in Africa than in other regions, with the exception of meat in South Asia (from a very low base). Within Africa, beef, milk and poultry are anticipated to provide favourable business opportunities for livestock producers, in both volume and value terms. However, market dynamics differ amongst the geographic hubs, including Western and Southern Africa; Northern and Southern Africa; and Central Africa.
Production will not keep pace with consumption. Africa is anticipated to increasingly become a net importer of animal-sourced foods. This represents a missed development opportunity, given the widespread societal benefits that inclusive growth of livestock can generate, particularly in a continent where the majority of rural dwellers depend fully or partly on livestock for their livelihoods. Consequently, investments, and policy and institutional reforms that target African livestock markets are required to ensure that the business opportunities generated by the growing demand for animal-sourced foods translate into widespread benefits for the population.
Formulating effective livestock sector policies and institutional changes require a flow of information on market conditions and on the constraints to market entry. These are rarely readily available and investments in data collection and in data collection systems should be given appropriate priority, as the basis for supportive policies and investment.2050

London is not on pace to meet its current emissions target, a 60 per cent reduction by 2025. We call on the next mayor of London to pick up the pace – and provide a plan for how they could pursue an ambitious new target, for London to be a zero-carbon city by 2050.

This presentation-style report sets out nine 'Essentials' and 12 'Desirables' for the next mayor to deliver, if the 2050 emissions target is to be achieved. As well as providing benefits in terms of reducing greenhouse gas emissions, many of these policies and investments will benefit Londoners by promoting economic growth, creating jobs, improving health and life expectancy, saving residents and businesses money and energy, and making London a nicer city to live in.

At the same time, London has a great opportunity to take a global leadership role in city-led climate change action, sharing with and learning from major towns and cities across the UK and internationally.

This report provides a new detailed quantitative assessment of the consequences of climate change on economic growth through to 2060 and beyond. It focuses on how climate change affects different drivers of growth, including labour productivity and capital supply, in different sectors across the world. The sectoral and regional analysis shows that while the impacts of climate change spread across all sectors and all regions, the largest negative consequences are projected to be found in the health and agricultural sectors, with damages especially strong in Africa and Asia.

Productivity is the ultimate engine of growth in the global economy. Raising productivity is therefore a fundamental challenge for countries going forward. This new OECD report on The Future of Productivity shows that we are not running out of ideas. In fact, the growth of the globally most productive firms has remained robust in the 21st century. However, the gap between those global leaders and the rest has increased over time, and especially so in the services sector. This implies that knowledge diffusion should not to be taken for granted. Future growth will largely depend on our ability to revive the diffusion machine, both within and across countries. At the same time, there is much scope to boost productivity and reduce inequality simply by more effectively allocating human talent to jobs.

The low-carbon cities in the APEC region differentiate from each other in terms ways and focuses of development due to their distinctive natural conditions, economic development, industrial structure and cultural tradition. Drawing from the experiences from all the member economies, this report offers suggestions for the development models and toolkit of low-carbon cities.
The concept of Low Carbon City originates in Low Carbon Economy, which was put forward in the context of coping with the global climate change and advocating less greenhouse gases emission during human production and living activities. In 2003, the government of United Kingdom published its "Energy White Paper" entitled "Our Energy Future: Creating a Low Carbon Economy", in which the concept of Low Carbon Economy was first put forward. The White Paper pointed out that Low Carbon Economy means to achieve more economic output by less natural resources consumption and environmental pollution, in order to create approaches and opportunities for a higher living standard and better living conditions, and to provide new business opportunities and more job opportunities for the development, application and output of advanced technologies. Low Carbon Economy gives consideration to both "Low Carbon" and "Economy", of which Low Carbon is a model that humans respond to the climate change to realize sustainable economic and social development. Low Carbon means we must reduce or even stop depending on carbon-based fuel to the greatest extent and realize energy utilization transition and economic transition in the pursuit of economic development; Economy, means we need to maintain a stable and sustainable economic development on the basis and in the course of energy utilization transition, however this concept should not exclude the maximum of development, output, and long-term economic growth.

The Growth Initiative working group, a working group seeking to strengthen long-term economic growth, proposes measures to boost productivity growth in Finland in the 2010s. In the long term, beyond the current economic cycle, growth in productivity will be the only driver of the nation’s average income growth or GDP per capita. In the short term, improving the employment rate is also important.
The Growth Initiative working group’s final report begins by providing a brief introduction to issues vital to productivity growth. It then presents the working group’s policy recommendations, divided under the following ten headings: 1) Science and innovation policy, 2) Education policy, 3) Life phase policy, 4) Competition policy, 5) Enterprise policy, 6) Public sector operating policy, 7) Public sector information system policy, 8) Public sector procurement policy and the general availability of publicly collected information, 9) Broadband network and intelligent transport policy and 10) Transport infrastructure policy.