How Developing Countries Can Lead the World Economy Tomorrow
According to prevailing wisdom, if you want your predictions to hold up, it’s best to avoid getting lost in details—especially specific timelines. However, the McKinsey Global Institute has taken an opposite approach, identifying 18 dynamic, high-growth “fields” expected to reshape the global economy over the next fifteen years.
These fields encompass digital industries like e-commerce, artificial intelligence, cloud services, digital advertising, live streaming, and gaming; advanced technologies such as electric vehicles, autonomous vehicles, batteries, semiconductors, robotics, and nuclear fusion; emerging areas like space and biotechnology; and breakthroughs in cybersecurity, aerial mobility, modular construction, and obesity treatments. Collectively, these sectors could represent 16% of global GDP by 2040, four times their current share, and drive economic growth, productivity, and living standards upward across the globe.
For instance, electric and autonomous vehicles could reduce traffic fatalities and help lower greenhouse gas emissions. Similarly, modular construction promises higher-quality housing at a lower cost.
At first glance, these developments may seem confined to advanced economies, as leading companies in these sectors are concentrated in the United States, Europe, and China. However, the impact will be significant everywhere, and in some fields, developing economies are particularly well-positioned to lead.
With the expansion of internet access, e-commerce, online advertising, and live streaming are likely to grow faster in low- and middle-income countries. Due to their lack of established legacy infrastructure, developing economies may be able to leap directly to emerging technologies, just as many of them skipped landline phones in favor of mobile technology, becoming early adopters of digital banking services.
India serves as a clear example. Its e-commerce market is the fastest-growing in the world, with revenues rising from $3.9 billion in 2009 to an expected $200 billion by 2024. By 2030, its share of online retail in total sales is projected to increase from 25% to 37%. While urban consumers currently dominate the market, access is improving in rural areas, providing hundreds of millions with higher-quality goods and services.
India also brings exceptional human capital to the table, boasting a growing pool of talent capable of driving global growth in fields like artificial intelligence, cloud services, and cybersecurity. As a cost-effective innovative nation, India has demonstrated its competitiveness in advanced fields. It has already become a leader in manufacturing two- and three-wheeled electric vehicles, and in 2013, its space program made headlines by launching the Mangalyaan spacecraft to Mars at a lower cost than similar U.S. and European missions. These strengths position India to expand in nine of the eighteen fields, potentially generating up to $2 trillion in additional revenue by 2030.
Other low- and middle-income countries have the capacity to forge their own paths. Brazil, for example, is investing in the next generation of aviation, while Morocco and Indonesia have emerged as hubs for electric vehicle battery manufacturing, leveraging their raw material reserves.
The growth of these fields not only generates new industries but also revitalizes traditional sectors. Robotics, drone delivery systems, and generative artificial intelligence are rapidly transforming established areas like manufacturing, retail, and healthcare.
In addition to their economic impact, many of these sectors could improve public services. Artificial intelligence can assist governments in collecting and analyzing data on everything from weather and traffic patterns to exam results. New obesity treatments are yielding positive health outcomes in both advanced and developing countries.
Yet, few developing nations are prepared for a future shaped by these fields. To strengthen their position, three priorities emerge. The first is creating a supportive business environment by adjusting trade, regulatory, and macroeconomic policies to allow vital industries the space to grow. For instance, modular construction can only enhance housing quality and affordability if building codes, zoning laws, and related regulations promote innovation and investment.
The second priority is attracting foreign direct investment. Currently, companies from China, Europe, and the United States dominate most of the eighteen fields and are actively seeking the best markets for expansion. However, since 2022, announced foreign direct investment flows into emerging economies have declined, representing only about 30% in fields like advanced manufacturing, AI infrastructure, and software services.
The third—and most crucial—priority is focusing on people. In the twentieth century, many developing countries began their economic ascent through low-cost manufacturing, gradually moving up the value chain. In contrast, most growth sectors in the twenty-first century rely on technology, making a well-educated and well-trained workforce essential, even for seizing initial opportunities.
As global competition intensifies, countries that successfully nurture a deep pool of productive talent will be better positioned for sustainable growth and prosperity. While this also applies to advanced economies, the stakes are particularly high for emerging markets still striving to catch up.
It is also worth considering that entirely new industries and technologies may arise. Just five years ago, very few people were aware of generative artificial intelligence. Furthermore, not all of the eighteen fields will progress at the same pace; the trajectory of sectors such as nuclear energy and electric vehicles will largely depend on policy-related choices. Nevertheless, these sectors are likely to lead global growth in the coming years, and developing countries that fail to adapt to them risk being left behind.
