McKinsey Quarterly 2023 Number 1

particularly in the West. The polarization of US politics has been well studied. Between 2010 and 2020, polarizing political parties nearly doubled their share of the popular vote. The number of citizen protests is on the rise. Liberal democracy faces not only increasing internal tensions but also opposition from rising powers with alternative ideologies.

Unresolved questions The following are some unresolved questions regarding the world order:

● What might the multipolarity of the world look like in practice? Will the economy remain global in nature, and will the world find new, workable mechanisms to cooperate beyond the economy? At one end of the spectrum, there could be a gradual transition to a multi polar order in which blocs develop autonomous control over limited, strategically important resources and capabilities–such as energy systems and semiconductor manufacturing– while global collaboration continues more generally. At the other end, there could be a more abrupt transition to much more limited collaboration among blocs across all dimensions, combined with heightened geopolitical tensions. - ● How effectively will global and local institutions and leadership adapt to and shape this different world order? On the one hand, global institutions could play a pivotal role in managing an orderly transition. Domestically, they could make the appropriate decisions and investments to thrive in a growing world. On the other hand, global institutions could be sidelined by international blocs, while shortsighted domestic decision making could lead to a misallocation of resources, exacerbating the strain on society. Key drivers of previous eras may slow in the coming years Certain drivers, such as Moore’s law and the spread of digital, might slow. The physical limits of Moore’s law are being approached–consider the atomic limit of transistor size–while the expense of adhering to Moore’s law is growing exponentially. However, new dimensions of semiconductor innovation may extend advances in computing power. A deceleration in hardware innovation may lead to greater emphasis on software development. In the era of markets, cell phones and the internet far outspread fixed-line phones and PCs in adoption. However, a saturation point may be near. While smartphones will become the norm even in the least developed countries, global growth in volume will end as demand falls in the West. Indeed, the number of smartphone shipments has been in decline globally since 2018. A set of transversal technologies may shape the next era New and emerging transversal technologies, such as applied AI, bioengineering, and immersive-reality technologies, are attracting up to hundreds of billions of dollars of annual investment, often with double-digit investment growth rates (Exhibit 2). These tech nologies may counteract the slowdown suggested earlier. For example, developments in quantum computing may spur the next big S-curve of development. - Technology platforms A new set of trends is shaping tomorrow’s technology landscape.

McKinsey Quarterly 2023 Number 1

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