McKinsey Quarterly 2023 Number 1

AI primacy among major powers is under way, with many recently questioning the belief that the United States leads its peers in AI capabilities.

There is competition for influence in global standard-setting bodies. Consider, for example, China’s ambition to take a more leading role through the China Standards 2035 strategy. There are concerns about the security implications of globalized hardware flows, as well as the selective block on exporting the world’s most sophisticated chip-making machines, which are produced by only a single company in the Netherlands. And cyberattacks as a tool of state power have increased. Between 2020 and 2022, 320 state-sponsored cyberattacks were publicly reported, which was nearly as many as in the full decade prior.

Unresolved questions The following are some unresolved questions regarding technology platforms:

● What impact will the next wave of technologies have on work and social order? AI tech nologies will present both opportunities for and challenges to the nature of society and work, the balance between digital and physical domains, the financial system, and the inter play among humans and machines. Many forecast that AI may lead to job disruption rather than job destruction. However, the threat of losing good jobs and the risk of leaving behind certain groups remain. Depending on the choices made, a smooth transition to an AI-augmented world could be engineered, or technology could fracture the social order. - - ● How will technology, institutions, and geopolitics interact? Technological innovation has become the crucible of global competition. Emerging questions concern the nature and extent of data localization, the balance–and sharing–of critical technological capabilities among powers, the role of technology in changing institutions, and the future frameworks for standard setting. Potential future paths range from healthy competition among powers under a broad framework of shared standards and breakthroughs to a decoupled world with a concentration of technological power held within blocs. A young world will evolve into an aging, urban world The world is aging as never before as a result of declining fertility rates and rising life expectancy. Globally, the world has reached the plateau of “peak child”–it’s unlikely that there will ever be many more people under the age of five alive than there are today. This demographic shift isn’t confined to the West: it’s set to become an Asian phenomenon too. In China, for example, the working-age population is already falling, and the old-age dependency ratio is projected to surpass that of the United States in the next 15 years. Africa, conversely, will be the source of more than half of global population growth in the coming decades. By the early 2030s, the continent is expected to have a larger working age population than will China or India and a median age of 20. As Africa, the young continent, continues to grow even as populations elsewhere shrink, could it finally enter into a sustained period of rising prosperity? Demographic forces An aging world is shifting in a variety of ways.

McKinsey Quarterly 2023 Number 1

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