Certain industries create more value and have a greater impact than others. We call these outperformers arenas of competition. They are defined by two characteristics: high growth and high dynamism. Due to their growth, they capture an outsize share of the economy’s overall expansion; in terms of dynamism, market share within them changes hands to an outsize degree. This report from the McKinsey Global Institute identifies 18 future arenas that could reshape the global economy between now and 2040. To do so, we first analyze a data set of the world’s 3,000 largest companies from 2005 to 2020 and pinpoint 12 arenas of today, including biopharmaceuticals, cloud services, e-commerce, and electric vehicles (Exhibit 1). Arenas of today refers to the arenas that formed over the past two decades. We used 2005 to 2020 as our analytical interval to delineate a clean decade boundary and ensure consistent, well-established data. We found striking differences between arenas and non-arenas. For example, the arenas of today generated 9 percent of our total sample’s economic profit in 2005. By 2019, they accounted for 49 percent of economic profit. These arenas are where major shifts in investment, R&D, value creation, and the rise of global corporations occur. We also identified an arena-creation potion by observing the evolution of our arenas of today, giving us a deeper understanding of arena emergence. The distinctive elements of a forming arena are a business model or technological step change, incentives for escalatory investments—those that improve quality and often have increasing returns to scale—and a large or growing addressable market.

Full report : Eighteen future arenas could reshape the global economy and generate $29 trillion to $48 trillion in revenues by 2040.