SYDNEY - There are some decades when only a year’s worth of change happens, and some years when a decade’s worth 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 feel like the latter. Indeed, they feel all too similar to the years surrounding the early 1970s oil shock, after which it took about 20 years to restore some semblance of stability. Can the world write a new narrative of progress more quickly this time?
The world has been through clusters of challenging events before. The three that stand out most are the immediate aftermath of World War 2 (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 the world, ushering in a new era.
Nevertheless, even during the direst of times, progress has continued.
Does this mean that the world is 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).
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