Entering 2026: strategy after the global economic realignment

The global economy in 2025 does not suffer from a lack of data. It suffers from signal distortion.

Executives are inundated with trend reports, forecasts, and dashboards, yet many still struggle to answer the questions that matter most at board and capital-allocation level: Where exactly is leverage forming? Where are the bottlenecks hardening? And which routes remain navigable when conditions shift?

The latest McKinsey Global Institute: 2025 in Charts offers something rare—a set of coordinates rather than commentary. When read as a system map rather than a collection of charts, the report reveals an economy governed by concentration effects, geopolitical compression, infrastructure constraints, and asymmetric payoffs. The implications are not abstract. They are operational, financial, and strategic.

From averages to asymmetry: why strategy has changed shape

The defining feature of the 2025 environment is non-linearity.

Productivity growth, capital formation, trade flows, and technology value creation no longer distribute evenly across firms or regions. Instead, outcomes are driven by small clusters of actors and assets that generate outsized impact. The report’s most consequential insight is that just 2 percent of firms—so-called “Standouts”—account for roughly two-thirds of positive productivity growth in the economies studied.

For executives, this reframes strategy fundamentally. The question is no longer how to lift the average performance of the organization, but how to identify, back, and scale internal units capable of non-linear contribution. Portfolio logic—once reserved for M&A or venture arms—is now a core operating discipline.

This concentration dynamic extends beyond firms. Capital, talent, and innovation are pooling into select arenas—technology-enabled sectors where competitive races are intense, rewards are steep, and displacement is rapid. The dramatic reshuffling of the world’s most valuable companies over the past two decades is not an anomaly; it is a preview of ongoing churn. Scale alone no longer protects incumbents. Adaptive capability does.

The global balance sheet: growth with fragile foundations

Beneath headline growth sits a quieter, more structural signal: how wealth has been created.

Using a corporate finance-style “global balance sheet” lens, the report shows that a substantial share of global household wealth growth since 2000 is attributable to asset price appreciation and inflation rather than net productive investment. In other words, balance sheets have expanded faster than underlying productive capacity.

For C-level leaders, this distinction matters. Asset-price-driven wealth behaves differently under stress than investment-backed growth. It is more sensitive to interest rates, confidence shocks, and geopolitical disruption. Strategic planning that assumes historical liquidity and valuation conditions will persist is increasingly fragile.

The implication is not pessimism, but capital discipline. Executives must stress-test strategies against valuation resets, refinancing regimes, and shifts in risk appetite—particularly for long-duration infrastructure, energy, and technology bets. In 2026, understanding where returns come from matters as much as how large they are.

Geopolitics as geometry: trade routes are rewriting themselves

Trade has not collapsed. It has reconfigured.

One of the report’s most revealing findings is that global trade is traveling shorter geopolitical distances, even as physical shipping distances continue to inch upward. The dominant variable is no longer cost efficiency alone, but alignment—political trust, regulatory compatibility, and strategic reliability.

Foreign direct investment patterns confirm this shift. Since 2022, roughly three-quarters of cross-border investment announcements have flowed into “future-shaping” industries: semiconductors, electric vehicles, batteries, AI infrastructure, and energy systems. The United States has emerged as a central magnet for semiconductor investment, while China’s inflows have fallen sharply relative to the prior period.

For executives, this is not a theoretical geopolitical debate. It directly affects where supply chains can realistically move. The report’s “rearrangement ratio” introduces a practical metric for sourcing decisions, revealing that while many business inputs can be reconfigured, certain categories—especially consumer goods—are far more “sticky.” Only a small share of consumer imports fall into the easy-to-rearrange category, exposing B2C leaders to higher vulnerability and more persistent inflationary pressure than their B2B counterparts.

The strategic takeaway is clear: resilience must be designed at the product level, not assumed at the portfolio level.

AI and the redesign of work: value lies between roles, not tasks

Artificial intelligence is often framed as an automation story. The data suggests otherwise.

AI agents could technically cover a large share of work hours, yet more than 70 percent of human skills remain relevant across both automatable and non-automatable tasks. The value unlock comes not from replacing people, but from redesigning workflows so that humans, agents, and robots operate as an integrated system.

This has direct implications for productivity and talent strategy. Organizations that automate tasks without rethinking roles, decision rights, and career pathways capture only shallow gains. Those that redesign how work flows—from customer interaction to operational decision-making—capture compounding benefits.

The report’s analysis of the “work-experience pay gap” reinforces this point. Roughly 80 percent of the gender pay gap is explained by differences in accumulated work experience and career pathways, not role-based discrimination alone. For executives, this highlights an often-overlooked lever: structuring careers to compound experience over time is both a social and economic optimization strategy.

Infrastructure, energy, and climate: bottlenecks with price tags

On energy and climate, the signal is unambiguous: execution is lagging ambition.

Deployment of low-emissions technologies is progressing at roughly half the pace required to meet long-term targets, with acute gaps in hydrogen, carbon capture, and heavy industry. These are not marginal sectors; they underpin industrial competitiveness and cost structures across value chains.

At the same time, the report reframes climate adaptation as an economic opportunity with unusually clear returns. Proven measures—cooling, irrigation, flood defenses—show benefit-cost ratios on the order of 7:1 in a warming world. The spending requirement is large, but so is the opportunity set for firms positioned in resilient infrastructure, materials, and services.

For C-level leaders, the implication is dual: transition delays create risk and volatility, while adaptation investment offers a rare combination of asset protection and growth adjacency. Treating adaptation as a compliance cost misses the strategic upside.

Executive coordinates: how to navigate safely

Taken together, the report does not describe a collapsing system, but a more demanding one. Navigation now requires precision.

Practical executive routes forward include:

• Reallocating capital toward productivity-scaling assets rather than balance-sheet expansion.
• Identifying and funding internal “Standout” units with portfolio-style discipline.
• Applying product-level sourcing realism using rearrangement metrics, especially in consumer categories.
• Redesigning workflows around human–AI collaboration, not isolated automation.
• Pricing demographic scarcity and climate adaptation into long-term strategy, not treating them as externalities.

The 2025 global economy rewards leaders who can read maps, not just trends. The coordinates are visible. The routes are calculable. The risk lies in navigating with outdated instruments.

Source attribution

This executive analysis is based on data and research from McKinsey Global Institute — 2025 in Charts.
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