Himanshu Saxena’s Post

Productivity growth is essential for raising and maintaining standards of living in our changing world. However, in many economies, this growth is slowing, particularly in advanced economies. 'Slow lane' emerging economies will be unable to reach the levels of advanced economies if they continue at their current pace, meaning people will inevitably suffer. Investment is needed to avoid these problems. This should come from both the public and the private sectors. Innovation also offers hope. New technologies such as AI can help make valuable productivity gains that will help economies reverse these trends. #Innovation #Productivity #ProductivityGrowth #EconomicGrowth

New Post: Asia’s Economies Can Embrace Services to Boost Growth and Productivity - https://lnkd.in/ekhWYzHv Economies Can Embrace Services to Boost Growth and Productivityhttps://lnkd.in/eZ-u6nzF Asia-Pacific region prospered by becoming the source of more than half of global factory output, but another transformation to higher-productivity services has the potential to further support growth. Tech The Asia-Pacific region prospered by becoming the source of more than half of global factory output, but another transformation to higher-productivity services has the potential to further support growth. Employment and production typically move from agriculture to manufacturing to services as part of the natural progression that comes with rising income. Today, many Asian countries—including China, Indonesia, Korea, and Thailand—are highly industrialised. If history is a guide, the industry’s share of production will shrink as more activity passes to services. Indeed, the growth of services has already drawn about half of the region’s workers into that sector, up from just 22 per cent in 1990, as hundreds of millions moved from farms and factories. This shift is likely to accelerate with further expansion of international trade in modern services such as finance, information, and communication technology, as well as business outsourcing (for example, as already done in India and the Philippines). By contrast, traditional services—for example, tourism or distribution services—have lower productivity and contribute less to economic growth. Policymakers should embrace this shift to modern services because they have higher productivity, as we show in an analytical note accompanying our October 2024 Asia-Pacific Regional Economic Outlook. Transitioning to a more services-led economy comes with greater economic growth opportunities, provided the right policies are in place. Productivity is an important variable when considering which sectors can best deliver growth in coming years. Manufacturing productivity in Asia is already close to the level of global leaders, so further improvement offers only limited scope to boost productivity and growth. By contrast, services in Asia don’t enjoy the same efficiency advantage, so the region’s economies have more to gain by catching up with countries that have the most efficient service sectors. In addition, in several service sectors like finance and business services, productivity is higher than in manufacturing, which means greater contributions to growth. For example, Asia’s labour productivity in financial services is four times higher than in manufacturing, and it’s twice as high in business services, our new analysis shows. Even so, countries need to have the right conditions in place to benefit from services. Manufac

New Post: Asia’s Economies Can Embrace Services to Boost Growth and Productivity - https://lnkd.in/e89PWc_m Economies Can Embrace Services to Boost Growth and Productivityhttps://lnkd.in/eFY2ZqJS Asia-Pacific region prospered by becoming the source of more than half of global factory output, but another transformation to higher-productivity services has the potential to further support growth. Tech The Asia-Pacific region prospered by becoming the source of more than half of global factory output, but another transformation to higher-productivity services has the potential to further support growth. Employment and production typically move from agriculture to manufacturing to services as part of the natural progression that comes with rising income. Today, many Asian countries—including China, Indonesia, Korea, and Thailand—are highly industrialised. If history is a guide, the industry’s share of production will shrink as more activity passes to services. Indeed, the growth of services has already drawn about half of the region’s workers into that sector, up from just 22 per cent in 1990, as hundreds of millions moved from farms and factories. This shift is likely to accelerate with further expansion of international trade in modern services such as finance, information, and communication technology, as well as business outsourcing (for example, as already done in India and the Philippines). By contrast, traditional services—for example, tourism or distribution services—have lower productivity and contribute less to economic growth. Policymakers should embrace this shift to modern services because they have higher productivity, as we show in an analytical note accompanying our October 2024 Asia-Pacific Regional Economic Outlook. Transitioning to a more services-led economy comes with greater economic growth opportunities, provided the right policies are in place. Productivity is an important variable when considering which sectors can best deliver growth in coming years. Manufacturing productivity in Asia is already close to the level of global leaders, so further improvement offers only limited scope to boost productivity and growth. By contrast, services in Asia don’t enjoy the same efficiency advantage, so the region’s economies have more to gain by catching up with countries that have the most efficient service sectors. In addition, in several service sectors like finance and business services, productivity is higher than in manufacturing, which means greater contributions to growth. For example, Asia’s labour productivity in financial services is four times higher than in manufacturing, and it’s twice as high in business services, our new analysis shows. Even so, countries need to have the right conditions in place to benefit from services. Manufac

The sluggishness of productivity growth has been a puzzle for more than a decade. Amid a drastic shift in inflation, interest rates, and global competitiveness, solving it has become increasingly urgent. MGI’s latest productivity research, takes a fresh look at why growth slowed, and what it would take to create a new wave Findings at a glance: 📈 The past quarter century has been a success story for global productivity. Median country productivity has jumped sixfold. Thirty emerging economies, with 3.5 billion people, are in the “fast lane” of improvement; if they maintained this pace, they would converge to advanced-economy productivity levels within roughly the next quarter century 📉 Yet amid this global revolution, many economies have experienced productivity stagnation. Advanced-economy productivity growth has slowed by nearly 1 percentage point since the global financial crisis (GFC). At their current pace of improvement, “slow-lane” emerging economies, home to 1.4 billion people, would never catch up to advanced-economy levels ⚡ Today the world needs productivity growth more than ever. It is the only way to raise living standards amid aging, the energy transition, supply chain reconfiguration, and inflated global balance sheets 💲 By investing to regain pre-GFC productivity growth, advanced economies stand to gain between $1,500 to $8,000 in incremental GDP per capita by 2030. These economies experienced their slowdowns as two waves of productivity growth in manufacturing (powered by Moore’s law and offshoring) came to an end. Post-GFC investment declined sharply and persistently, failing to generate anything to take their place. But today, directed investment in areas such as digitization, automation, and artificial intelligence could fuel new waves of productivity growth 💸 Investment is also the primary driver for emerging economies to reach or remain in the “fast lane.” Current fast-lane economies (China, India, parts of Central and Eastern Europe, and Emerging Asia) have sustained high investment, at 20 to 40 percent of GDP. They have channeled it into building the cities and infrastructure that underpin successful urbanization, high productivity growth in service sectors, and globally connected manufacturing. Countries in the middle and slow lanes might follow suit 🤖 There is reason for hope and motivation for action. Higher inflation and interest rates may signal stronger demand and encourage productive capital allocation— while discouraging the increasing debt and inflating asset prices of the past two decades. AI has potential to change work rapidly and broadly, creating fertile conditions for such investment

If this report has a common thread, it is the importance of investment. Half of the drop-off in productivity growth in advanced economies is a slowdown in capital deepening (the growth of capital per worker). High capital deepening is also the key characteristic of emerging economies in the fast lane. Investment flows best in “high-pressure” economies that enjoy strong demand, strong growth, and low unemployment. Inflationary pressure and rising interest rates could be signs that we are leaving behind secular stagnation and entering an era of higher demand and investment. 

Over the past 25 years, global productivity in median economies has surged sixfold. However, since the 2008 financial crisis, advanced economies have faced a slowdown, with productivity growth dipping below 1% annually. This calls for urgent action. The solution? Targeted investments in digitization, automation, and AI to reverse this trend and drive economic growth. Emerging economies have set a strong example, maintaining high investment levels—20%-40% of GDP—to achieve significant productivity gains. By prioritizing productivity-enhancing investments, we can foster sustainable economic growth and improve global living standards. Few of the key points from McKinsey & Company's report on investing in productivity growth: ✔️ Global productivity surged in the past 25 years, with a sixfold increase in median economy productivity. ✔️ Post-2008 slowdown: Advanced economies have seen productivity growth fall below 1% annually since the financial crisis. ✔️ Need for targeted investments in digitization, automation, and artificial intelligence to revitalize productivity. ✔️ Emerging economies outperform due to consistent investments ranging from 20% to 40% of GDP, driving significant gains. ✔️ Strategic focus on productivity is crucial for achieving sustainable economic growth and improving global living standards. For more insights, explore the full report https://lnkd.in/eN22rHar At 10XG Martech Solutions, we help businesses leverage digital technologies to optimize operations and drive growth. 👉 Ready to boost productivity? Let’s connect to explore tailored strategies. 📩 hello@10xgmartech.com #ProductivityGrowth #DigitalTransformation #BusinessSuccess #10XGMartech #Innovation

🔎 In the 2nd half of 2024, what is the risk outlook of the top 5 largest economies in the world? US, China, Germany, Japan, and India continue to hold the top 5 positions in terms of GDP. In this global economic competition, the US has demonstrated a relatively strong growth momentum, with a 3.0% increase in the first half of the year. China, the second-largest economy globally, saw a 5.0% year-on-year increase in GDP in the first half. India’s economic performance is particularly impressive, with a growth rate as high as 7.2% in the first half of the year. The German economy contracted by 0.2% year-on-year in the first half. However, thanks to the dual impact of the appreciation of the euro and inflation, the GDP calculated in US dollars actually increased. Japan’s economic performance is even more subdued, with the economy contracting by 0.9% year-on-year in the first half, falling to $1.96 trillion. 💡 Looking ahead to the second half of the year, Criat has conducted an in-depth analysis of the risk conditions of the five major economies to provide a new perspective to understand the risk positioning of different countries in the global landscape. 💡 In the chart below, the x-axis represents the percentiles of PD for all companies in each country, and the y-axis shows the global position corresponding to the country’s percentile. By interpreting these data, we have drawn the following insights: ·        The risk distribution in US shows a significant differentiation. The 50th percentile of US roughly corresponds to the global 50th percentile, but its 25th percentile only corresponds to the global 20th percentile, and the 75th percentile reaches as high as the global 90th percentile. This indicates that there is a great difference in the PD of US companies, with safe companies being exceptionally safe and risky ones being extremely dangerous. ·        China’s overall risk level is relatively high. However, it is worth noting there are few extremely dangerous companies in China, while there are no particular safe companies either. ·        The risk distribution of Germany and India does not show significant differences compared to the global market. ·        Japan’s risk situation is surprisingly good. It’s 75th percentile only corresponds to the global 30th percentile, which means that even if a company is ranked in the 25th percentile in Japan, its safety level is far higher than 70% of companies globally. Financial Times Nikkei Asia Reuters The Wall Street Journal Bloomberg The Australian Financial Review The Business Times #financialtechnology #innovation #investmentmanagement #creditrisk #creditanalytics

#Productivity growth has always been important - but now it is urgent! Inflation of the global balance sheet has created $160tn in paper wealth on the back of rising debt over the past two decades, and more recently, consumer price inflation has spiked. Faster productivity growth is the best answer to deal with both and mitigate the risks. How to get it may seem complex - but is also simple in one important way: If you don't invest, you won't get productivity growth. Unfortunately, advanced economies have all but stopped investing since the Global Financial Crisis. Reversing this trend will be critical - and feasible. There are positive signs. A "high pressure" economy with strong demand and tight labor markets may well be the one of the most important signals for businesses to invest in capacity expansion and automation. In addition, AI is unleashing an unprecedented wave of digital investment. For more, see our new report I had the pleasure to author with my colleagues Chris Bradley, Olivia White, Sven Smit, Marc Canal Noguer, and Denitsa Georgieva: mck.co/productivity2024

𝐔𝐧𝐥𝐞𝐚𝐬𝐡𝐢𝐧𝐠 𝐏𝐫𝐨𝐝𝐮𝐜𝐭𝐢𝐯𝐢𝐭𝐲: 𝐀 𝐂𝐚𝐥𝐥 𝐭𝐨 𝐑𝐞𝐢𝐧𝐯𝐢𝐠𝐨𝐫𝐚𝐭𝐞 𝐄𝐜𝐨𝐧𝐨𝐦𝐢𝐜 𝐆𝐫𝐨𝐰𝐭𝐡 🚀 In recent decades, global productivity has experienced a seismic shift, yet the pace has significantly slowed since the 2008 financial crisis. This slowdown has implications for both advanced and emerging economies, highlighting an urgent need for strategic investments and policy adaptations to reignite productivity growth. 𝐓𝐡𝐞 𝐃𝐨𝐮𝐛𝐥𝐞-𝐞𝐝𝐠𝐞𝐝 𝐒𝐰𝐨𝐫𝐝 𝐨𝐟 𝐏𝐫𝐨𝐝𝐮𝐜𝐭𝐢𝐯𝐢𝐭𝐲 𝐓𝐫𝐞𝐧𝐝𝐬 ⚖️ Historically, productivity growth has been the cornerstone of economic prosperity, driving improvements in living standards across the globe. In the past 25 years, median global productivity surged sixfold. However, advanced economies have seen their productivity growth decelerate, falling from an average of 2.2% per year before 2008 to less than 1% in the last decade. This deceleration is particularly concerning as it hinders these economies' ability to cope with current challenges such as demographic shifts, technological changes, and environmental sustainability. 𝐓𝐡𝐞 𝐏𝐨𝐭𝐞𝐧𝐭𝐢𝐚𝐥 𝐨𝐟 𝐄𝐦𝐞𝐫𝐠𝐢𝐧𝐠 𝐄𝐜𝐨𝐧𝐨𝐦𝐢𝐞𝐬 🌏 Emerging economies present a silver lining, with some like China and India making notable progress. Their success can be attributed to sustained high levels of investment, typically between 20% to 40% of GDP, in infrastructure and technology, which have underpinned robust productivity gains. However, the variance among emerging economies is stark, with some potentially taking up to 135 years to catch up to advanced economy levels, if ever. 𝐑𝐞𝐢𝐧𝐯𝐢𝐠𝐨𝐫𝐚𝐭𝐢𝐧𝐠 𝐀𝐝𝐯𝐚𝐧𝐜𝐞𝐝 𝐄𝐜𝐨𝐧𝐨𝐦𝐢𝐞𝐬 💼 For advanced economies, the post-2008 era has been marked by a stark decline in productivity growth. This slump can be traced back to two main factors: the end of significant manufacturing innovations and a persistent decline in investment across multiple sectors. To regain pre-financial crisis productivity growth rates, advanced economies could potentially add between $1,500 to $8,000 in incremental GDP per capita by 2030. 𝐀 𝐒𝐭𝐫𝐚𝐭𝐞𝐠𝐲 𝐟𝐨𝐫 𝐂𝐡𝐚𝐧𝐠𝐞🌟 The path forward requires a concerted effort from both private and public sectors. Additionally, fostering an entrepreneurial culture and removing bureaucratic impediments will be crucial in accelerating productivity growth. 𝐂𝐚𝐥𝐥 𝐭𝐨 𝐀𝐜𝐭𝐢𝐨𝐧 📢 𝐓𝐡𝐞 𝐭𝐢𝐦𝐞 𝐭𝐨 𝐚𝐜𝐭 𝐢𝐬 𝐧𝐨𝐰. We must channel investments into areas with the highest potential for productivity gains and ensure that policies are aligned to support sustained economic growth. 𝐋𝐞𝐭'𝐬 𝐜𝐨𝐥𝐥𝐚𝐛𝐨𝐫𝐚𝐭𝐞 𝐭𝐨 𝐬𝐡𝐚𝐩𝐞 𝐬𝐭𝐫𝐚𝐭𝐞𝐠𝐢𝐞𝐬 𝐰𝐡𝐞𝐫𝐞 𝐩𝐫𝐨𝐝𝐮𝐜𝐭𝐢𝐯𝐢𝐭𝐲 𝐠𝐫𝐨𝐰𝐭𝐡 𝐜𝐨𝐧𝐭𝐢𝐧𝐮𝐞𝐬. 𝐉𝐨𝐢𝐧 𝐭𝐡𝐞 𝐃𝐢𝐬𝐜𝐮𝐬𝐬𝐢𝐨𝐧💬 What steps should your businesses take to enhance productivity? What strategies do you deem fit for purpose?. #ProductivityGrowth #EconomicDevelopment #Innovation #Strategy #GlobalEconomy