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Sternfels (McKinsey): «How to become a world leader with quality and speed. But inequalities are a big worry».

di Isabella Bufacchi

Bob Sternfels, Global Managing partner of McKinsey & Company

I punti chiave

  • The costs of breaking up globalization would be enormous
  • Italian SMEs world leaders based on quality, competence not geography
  • 8 out of 10 people today live in countries where inequality gaps are widening
  • If space is not on your radar, you are probably missing something
  • The pay-back times of AI are quick
  • Speed matters

6' di lettura

Here the full text of the exclusive interview with Bob Sternfels, Global Managing partner of McKinsey & Company. The interview was made in Rome.

What takes you to Italy? After all Italy and the UE look small compared to the USA or China or India.
McKinsey has a deep commitment to Italy. We have offices in Milan and Rome with about 600 people and we are continuing to grow, and we will continue to invest in Italy. Why Italy? With all the uncertainties in the world, I see an opportunity for outsized leadership from Italy. I am not naïve about the challenges Italy is facing: a difficult economic environment, energy issues, inflation, a shrinking workforce, the big difference between North and South. And yet, I see real potential: many Italian SMEs are the number one in their area. I think there is an opportunity in globalization for Italian SMEs: technological solutions for sustainability are emerging from Italian companies and that’s why I think Italy could lead the way on climate. The same could be said for pharmaceuticals: Italy is the number one manufacturer in Europe in this field so there is an opportunity for more Italian leadership there. When I meet Italian business leaders, I see their ability to navigate uncertainty. That is a strength going forward. This is a source of differentiation, an opportunity for leadership. I came to Rome and Milan to test what I see as Italy’s potential for leadership worldwide.


Yet size counts and in the future it will count even more. Europe and the USA might become smaller and smaller compared to China and India… so what chances can Italian SMEs have?
Is it a matter of quantity or quality? Of quality. What I see across the Italian industry is a real commitment to quality: in manufacturing, in retail consumer food, you name it. You can scale based on the quality of your product and brand. So it comes down to a question of confidence and of raising the ambition level. You can be a world leader based on the quality of your products and on your competence, not on the geography you come from. Italian companies can be world leaders as opposed to regional leaders.

How can a company become a world leader now in times of de-globalization and fragmentation?
I agree, things are changing. And the global paradigm we grew with is being rethought. I am humble enough not to predict what will come next. But there are components in this change that I see as positives, and others that worry me. Our research team at the McKinsey Global Institute looked into the trends of the last 30 years. Globalization led to an acceleration of world GDP growth over the last three decades, driven for 2/3 by low income countries where trade in goods, data, IP played a vital role. We also saw inequality differences closing the gap across the poorest and the richest countries, this gap narrowed. Globalization lifted the poorest countries in the world, it raised education levels and longevity, for example. But there were also stresses in the system: inequality gaps inside countries widened. 8 out of 10 people today live in countries where inequality gaps are widening. May this be the end of globalization? I hope not, because the costs of breaking up would be enormous.

How enormous?
In McKinsey we did some research on what would happen with a full decoupling, industry by industry, as far down as six levels of value chains. We found out that between 10% and 35% of global GDP is at risk, if we broke trade. No region is an island. All regions have some dependencies from other regions. Most people know how dependent is the US on imports from China, or how Germany is depends on exports to China. But equally China depends on agriculture from , or Brazil or raw materials from Australia. The world is very interconnected. Yet the pandemic showed us that supply chains were fragile, too concentrated: one single-point failure in a place, such as a harbor, or a railway, could stop the whole chain with very serious consequences. I hope we won’t back away from globalization, we just need to rethink it in a more diversified and resilient way: new markets for supply chains are opening up, India, Vietnam, Mexico and Indonesia are growing thanks to diversification.

Rising costs are everywhere. On the top of diversification, there is the green and digital transformation, there is higher inflation and higher interest rates. The bill is extremely high in a world of high public debt, especially in Italy. Don’t you agree?
Yes there are a massive amount of investments to make. How are we going to pay for all this? First of all, as you mention Italy, I must say that what I like about Italy - and this is also another reason why I am bullish on Italy - is the private debt to Gdp, which is very underleveraged. Businesses in Italy are fairly conservative in terms of healthy balance sheets. This means that these Italian companies can weather better in times of turbulence, compared to countries with high private debt to Gdp.

We have to look carefully at both sides of the balance sheet: that is, where do we need to invest but also where do returns come from. In the sustainability challenge, McKinsey research found out that between now and 2050 an amount of over 9 trillion US dollars will have to be invested in the world every year to hit the transition goals. A massive amount. We also saw business opportunities and potential with green new technologies: 12 trillion US dollars of new revenues are associated with these businesses. There is a way to make green technologies pay partially the green bill and offset the costs. Diversification of trade and supply chains is not only a pure cost too, it is also an investment, a one time investment.

What about the costs of Artificial intelligence (AI)?
There is a massive investment required here. We looked at AI in 63 specific use cases, industry by industry. We found out that there is an equivalent of 2.6 to 4.4 trillion US dollars of new revenue potential associated with the practical implementation of the GenAI today. The pay-back times are quick. As for climate protection investments, returns will be there for technology. Just don’t wait too long to implement new green technologies, don’t back off: this is our piece of advice.

Does speed matters? Wasting time comes with a cost..
Yes, speed matters. We measured speed. McKinsey found out that faster companies outperform slower companies anywhere between 30% and 50% of shareholders returns. It is a massive return. We also found out that faster companies with bad strategies or strategies that were not perfect outperformed slower companies with really good strategies. It sounds odd: the world is changing so fast, there is a premium on speed. It is not how perfect your vision is, but how quickly you can adapt to changes in the world around you. You need to be sustainably faster: this is what CEOs want now.

And what about governments? Can they go as fast as corporates?
The stereotype is that no government or institution is fast enough compared to corporates. And yet the US Congress has passed three pieces of legislation in short order: the Infrastructure Bill, the Chips Act and the Inflation Reduction Act. All three were passed in just one year. That was quick.

So if speed is so important, will it be as important to be the fastest to win the race to space?
Space is good for the world. Look at the Apollo 11 mission to the Moon for example: the semiconductors industry came from there, and software really started to develop there. We are now experiencing a new space renaissance: is there the same kind of potential in innovation now in space as there was for Apollo 11? If space is not on your radar, you are probably missing something. I say this to all industrial sectors. Space has implications for all business models. Space could be one of the next big frontiers. Creativity spurred by really challenging goals unlocks potential.

Let’s come back with our feet to Earth: what worries you the most?
Demographics, climate, geopolitics…? All these are worries but what worries me the most is the economic growth of inequality within so many countries, 8 out of 10 people as I said live in a country with growing inequality. In this Europe could lead the way as you are ahead in social inclusion. Growth comes more in places where people feel they can have a shot: we need inclusive growth. Let’s look at Africa: its role will be central in the next decade but not only for raw materials in the climate change transition and supply chains, but I think Africa, with upskilling and the commitment to skill building, will play a crucial role in intellectual property jobs, based in Africa, that will drive economic growth. When you play global demographics forward, Europe will shrink, the US will shrink slightly, China will shrink, India will grow for a while but then it will flatten. The only continent that is young and will stay young is Africa. And it will be a world with young African talents going forward.

Riproduzione riservata ©
  • Isabella Bufacchivicecaporedattore corrispondente dalla Germania

    Luogo: Francoforte, Germania

    Lingue parlate: inglese, francese, tedesco, spagnolo

    Argomenti: mercato dei capitali, ECB watcher, fixed income e debito, strumenti derivati, Germania

    Premi: Premio Ischia Internazionale di Giornalismo per l’analisi economica, Premio Q8 per giovani giornalisti economici



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