According to conventional wisdom, if you want your predictions to hold up, it’s best to avoid too much detail – especially specific timelines. The McKinsey Global Institute, however, has taken the opposite approach, identifying 18 high-growth, dynamic “arenas” poised to reshape the global economy over the next 15 years.

These arenas include digital industries like e-commerce, AI, cloud services, digital advertising, streaming, and gaming; advanced technologies such as electric vehicles ( EVs ), autonomous vehicles, batteries, semiconductors, robotics and nuclear fission; emerging fields like space and biotechnology; and breakthroughs in cybersecurity, air mobility, modular construction, and obesity drugs. Collectively, they could account for 16% of global GDP by 2040, quadruple their current share, and drive economic growth, productivity and living standards worldwide.

EVs and autonomous vehicles, for example, could reduce traffic deaths and help cut greenhouse-gas emissions. Likewise, modular construction promises higher-quality housing at a lower cost.

At first glance, such developments may appear relevant only to advanced economies. After all, the leading companies in those sectors are concentrated in the United States, Europe and China. But the impact will be felt everywhere, and in some arenas, developing economies are especially well-positioned to lead.

For example, as internet access expands, e-commerce, online advertising, and streaming are likely to grow faster in low- and middle-income countries. Because they lack entrenched legacy infrastructure, developing economies may be able to leapfrog directly into emerging technologies, just as many of them once leapfrogged landline telephony in favour of cellular technology and became early adopters of digital banking.

India is a case in point. Its e-commerce market is the fastest growing in the world, with revenues surging from US$3.9 billion in 2009 to US$200 billion in 2024. By 2030, online retail’s share of total sales is projected to rise from 25% to 37%. While the market is currently dominated by urban consumers, rural access is improving, providing hundreds of millions of people with higher-quality goods and services.

India also brings exceptional human capital to the table, with a growing talent pool that could drive global growth in AI, cloud services and cybersecurity. As a low-cost innovator, it has shown that it can compete in sophisticated fields. The country is already a leading manufacturer of two- and three-wheeled EVs, and in 2013 its space programme made headlines by launching the Mangalyaan Mars orbiter at a fraction of the cost of comparable US and European missions. Taken together, these strengths position India to expand in nine of the 18 arenas, generating up to US$2 trillion in additional revenue by 2030.

Other low- and middle-income countries have the potential to forge their own paths. Brazil, for example, is investing in next-generation aviation, while Morocco and Indonesia have emerged as hubs for EV battery manufacturing by leveraging their reserves of critical raw materials.

The growth of these arenas is not only spawning new industries but also reviving traditional ones. Robots, delivery drones and generative AI, for example, are rapidly transforming established sectors like manufacturing, retail and healthcare.

Beyond their economic impact, many sectors could improve public services. AI can help governments collect and analyze data on everything from weather and traffic patterns to exam results. And new obesity treatments are delivering positive health outcomes in both developed and developing countries.

Yet few developing countries are prepared for a future shaped by these arenas. To strengthen their position, three priorities stand out. The first is to create a supportive business environment by adjusting trade, regulatory, and macroeconomic policies to give vital industries the space to grow. Modular construction, for example, can improve housing quality and affordability only if construction codes, zoning laws and related regulations encourage innovation and investment.

The second priority is attracting foreign direct investment ( FDI ). Companies from China, Europe, and the US currently account for most of the 18 arenas and are actively seeking the best markets in which to expand. But since 2022, the share of announced FDI flowing to emerging economies has declined, accounting for only about 30% in areas like advanced manufacturing, AI infrastructure and software services.

The third and most important priority is people. In the 20th century, many developing countries began their economic ascent with low-cost manufacturing before gradually moving up the value ladder. By contrast, most of the 21st century’s growth sectors are technology-driven, making a well-educated and trained workforce essential, even for upstream opportunities.

As global competition intensifies, countries that cultivate a deep pool of productive talent will be best positioned to achieve sustained growth and prosperity. While this is also true for advanced economies, the stakes are especially high for emerging markets still striving to catch up.

It is also worth keeping in mind that entirely new industries and technologies could emerge. After all, few had even heard of generative AI just five years ago. Moreover, not all 18 arenas will advance at the same pace; the trajectory of sectors like nuclear power and EVs will depend heavily on policy choices. Even so, they are likely to drive global growth in the years ahead, and developing countries that fail to adapt, risk falling behind.

Kweilin Ellingrud is the director of the McKinsey Global Institute, Kevin Russell is a senior fellow there and Suhayl Chettih is a fellow at the institute.

Copyright: Project Syndicate