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The Cusp of a New Era?

Years of remarkable progress in health, wealth, education, and the deepening of global interconnections have made people much better off overall. But the world has entered a new period of turbulence, and it remains to be seen what new rules and institutions will emerge from it.

SYDNEY – There are some decades when only a year’s worth of change happens, and some years when a decade’s worth of change happens. The past three years – marked by the COVID-19 pandemic, Russia’s invasion of Ukraine, and a full-blown cost-of-living crisis, all playing out against a backdrop of heightened geopolitical tensions – certainly feels like the latter. Indeed, it feels all too similar to the years surrounding the early 1970s oil shock, after which it took about 20 years for stability to return. Can we write a new narrative of progress more quickly this time?

We have been through clusters of challenging events before. The three that stand out are the immediate aftermath of World War II (1944-46), the 1971-73 oil crisis, and the breakup of the Soviet empire (1989-92). Like an earthquake, each changed the global landscape with the sudden release of powerful underlying forces that had been building up around a fault line. Each also changed the rules governing key features of our world, ushering in a new era. But, through it all, progress has continued.

So, are we now on the cusp of a new era? To answer that question, a new McKinsey Global Institute paper considers five major dimensions of today’s world: global order (the institutions, frameworks, and rules that shape international affairs); technology (the platforms and applied sciences enabling development and innovation); demographics (important trends and socioeconomic contours across populations); resources and energy (the systems for transporting and converting energy and materials for use); and capitalization (the drivers of global supply and demand, and the overall trajectories of finance and wealth).