More Future Arenas of Competition – Asrar Qureshi’s Blog Post #1044

More Future Arenas of Competition – Asrar Qureshi’s Blog Post #1044

Dear Colleagues! This is Asrar Qureshi’s Blog Post #1044 for Pharma Veterans. Pharma Veterans Blogs are published by Asrar Qureshi on its dedicated site https://pharmaveterans.com. Please email to pharmaveterans2017@gmail.com for publishing our contributions here.

Credit: Anastasia Shuraeva

Credit: Craig Adderley

Credit: Gustavo Fring

This blogpost is based on a survey report of MGI – Mckinsey Global Institute. Owing to the enormity of subject, this is the third and the last post on the subject. Links at the end.

Preamble

The MGI survey identified 12 arenas from 2005 to 2020, in which certain companies grew much bigger than others. Based on this learning; they also identified 18 arenas of today which possibly would shape the global economy, generating $29 trillion to $48 trillion in revenue by 2040.

More Out of 18 Future Big Arenas

Electric Vehicles – EVs

Electric Vehicles’ technology has been around since the invention of automobiles. Electric-powered, steam-powered, gas-powered cars were competing to get more market in the initial decades. However, as the fossil fuel became abundantly available at a cheaper price, the market tilted in favor of gasoline-run vehicles. The ecosystem was also built around this technology, like we have fuel pumps at every few meters in city and even on highways. 

Electric vehicle was abandoned later. A 2006 documentary by Chris Paine ‘Who Killed the Electric Car’ makes an unapologetic case for the car and an unofficial indictment of the forces allied against it. The film focused on General Motors’ EV1 electric vehicle launched in 1996. Running solely on electricity, it was so efficient it would have changed the future of driving in America. The film details the California Air Resources Board’s reversal of approval under relentless pressure and lawsuits from automobile manufacturers, oil industry, and finally the senior George Bush administration.

More recently, EVs have been making a global come back on the heels of environment concerns. In 2023, EVs accounted for 18 percent of all new passenger cars sold globally. Breakthroughs in battery technology to give longer mileage, multiple market players, lower prices, and new government regulations are pushing EV sales forcefully. Global EV sales are projected to increase fourfold, from 13 million in 2023 to between 31 to 46 million in 2030. Chinese firms are leading the EV revolution. 

The survey estimates that revenues will grow from $450 billion in 2022 to $2.5 trillion in lower range and $3.2 trillion in the higher range, a CAGR of 10 to 12 percent. 

Semiconductors

Semiconductors, also called microchips are the invisible building blocks of the digital world. Their importance and omnipresence were highlighted during the COVID-19 pandemic, when a surge in demand led to supply shortages of not only computers, smartphones, and consumer electronics but also of cars and household appliances, as all of these rely heavily on microchips.

The industry revenues increased at a CAGR of 7 percent from 2005 to 2020. Industry demand in several markets is driving the growth of semiconductors. In the modeled scenarios, the revenue grows from $630 billion in 2022 to $1.7 trillion in lower range and $2.4 trillion in higher range in 2040. 

Digital Advertising

Digital advertising brings enormous amount of revenue to internet, and growth in digital ads is expected to continue, indicating that the industry could be one of the arenas of tomorrow.

Digital advertising is expected to grow faster than GDP. The estimated revenues increase from $520 billion in 2022 to $1.2 trillion in lower range and $2.9 trillion in higher range in 2040. Much of this growth comes from the ongoing shift in advertising spend from traditional to digital media. In 2022, digital advertisements accounted for 65 percent of total advertising and is expected to grow to 80 to 90 percent by 2040.

Shared Autonomous Vehicles – SAVs

Shared autonomous vehicles are road vehicles that have no human driver and can be hired to transport passengers for a fare. The industry is in its infancy. However, many companies are designing purpose-built SAVs, and several are already road-testing regular vehicles enabled with autonomous technology. The industry’s rapid technological development is a sign that it could become an arena.

As per estimates, SAVs could capture 25 to 51 percent of the shared mobility industry’s revenues by 2040, taking market share from human-driven taxis and ride-hailing services. Because the pace of technological development and adoption of SAVs is uncertain, the revenue estimates in 2040 are wide, from $610 billion to $2.3 trillion.

Space

 Historically, most of the demand for space endeavor has been driven by the government interests rather than commercial opportunities. Over the past decade, however, the industry’s commercial sector has seen robust growth. Several space companies, particularly SpaceX have accelerated growth providing internet services, launch services, and human transport services.

It is estimated that the space industry’s revenues shall grow from $300 billion in 2022 to $960 billion by 2040 in the lower range and to $1.6 trillion in the upper range, a CAGR of 7 to 10 percent.

Cybersecurity

The cybersecurity industry protects computer systems – computers, networks, cloud and web applications, network-connected manufacturing equipment, programs, and data, from unintended and unauthorized access, modification, or destruction. Cyberattacks are becoming more frequent, complex and costly, hence this industry’s prospects of becoming arena.

The cybersecurity industry’s revenue could grow from $160 billion in 2022 to $590 billion in the lower range and $1.2 trillion in higher range in 2040, a CAGR of 8 to 12 percent.

Batteries

Batteries are key to energy transition. The battery industry’s value chain extends from mining and processing raw materials such a lithium and nickel, to cell manufacturing, to combining cells into rechargeable battery packs used for EVs, and many other applications. Costs have fallen from thousands of dollars per kilowatt-hour in early 2000s to less than $100 today.

The battery industry produced 760 GWh of battery capacity in 2022, increasing to 12,800 in the lower range and 13,700 in the higher range by 2040. Revenue shall increase form $98 billion in 2022 to $810 billion in the lower range and $1.1 trillion in the higher range by 2040.

Modular Construction

With a value of $13 trillion, construction is one of the largest industries in the global economy. The need for transformation is urgent because there is global housing shortage and affordability crisis.

Experts forecast that the modular construction industry could expand substantially over the next 10 to 15 years. The revenues could grow from $180 billion in 2022 to $540 billion or $1.1 trillion by 2040, a CAGR of 10 percent.

Streaming Video

The streaming video industry delivers long-form video entertainment over the internet. The global number of households that used these services rose from 320 million in 2017 to 670 million in 2022. This could easily exceed one billion by 2040.

Second, spending on subscriptions and transactions by each household with at least one paid streaming service grows from global average of $10 a month in 2022 to $20 to $40 a month in 2040.

Video Games

The number of video-game players increased from 1.9 billion in 2018 to 2.6 billion in 2023. People born between 1995 and 2010 spend more time playing games than they do watching TV. There has been a surge in game playing on mobile phones; in 2017, there were an estimated 1.2 billion mobile gamers. 

Video games’ revenues of $230 billion in 2022 accounted for 35 percent of the total for the overall video entertainment industry, behind traditional video at 41 percent. Video games share could increase to 44 percent by 2040, the largest in the industry, outperforming streaming video and traditional video.

Drugs for Obesity and Related Conditions

As the world grows more prosperous and people live longer, the already large impacts of chronic conditions such as cardiovascular disease, chronic obstructive pulmonary disease (COPD), cancer, diabetes, and brain diseases (including Alzheimer’s disease) are expected to increase. Globally, chronic diseases were causes or contributing factors in 75 percent of deaths in 2010 and 79 percent in 2020; by 2030, experts predict that they could be a factor in up to 84 percent of global mortality as more countries develop.

Obesity, the prevalence of which has skyrocketed over the past 20 years, has been directly linked to some of these chronic conditions, contributing to type 2 diabetes, heart disease, and some cancers.

In the survey modeling, the market could grow from $24 billion in 2022 to $120 billion by 2040 in a lower range of scenarios and to $280 billion by 2040 in a higher range, a 9 to 15 percent CAGR. Global spending on drugs reached $1.48 trillion in 2022 and is forecast to increase 7 percent a year until 2028.

Sum Up

This brings to end the summary of the 200-page report compiled by MGI experts. I got a lot of enlightenment reading through this report. I hope that you enjoyed these posts and that you may use some of this information for future planning.

Concluded.

Disclaimers: Pictures in these blogs are taken from free resources at Pexels, Pixabay, Unsplash, and Google. Credit is given where available. If a copyright claim is lodged, we shall remove the picture with appropriate regrets.

For most blogs, I research from several sources which are open to public. Their links are mentioned under references. There is no intent to infringe upon anyone’s copyrights. If, however, it happens unintentionally, I offer my sincere regrets.

Reference:

https://www.mckinsey.com/~/media/mckinsey/mckinsey%20global%20institute/our%20research/the%20next%20big%20arenas%20of%20competition/the-next-big-arenas-of-competition_final.pdf 

https://www.mckinsey.com/mgi/our-research/the-next-big-arenas-of-competition 

https://www.mckinsey.com/about-us/new-at-mckinsey-blog/the-wizardry-behind-18-hyper-growth-industries?stcr=0414B29EA4DA45D594CC8374A2E646E0&cid=other-eml-alt-mip-mck&hlkid=495f312c5fa5451b90aecbe5c9155fcf&hctky=15999472&hdpid=08c2061a-46ab-4317-97d4-79df8e810fdb