McKinsey welcomed more than 40 journalists to London for the firm’s largest Media Day. Fifteen partners took part in panel discussions, sharing insights that reflect the wide scope of our work. Topics ranged from the monetary value of Harry Potter as a cultural icon—a highlight from new McKinsey research on arts in the United Kingdom—to frontier technologies, innovative approaches to reskilling, and strategies for European competitiveness.
Following are three topics that will demand our attention in 2025.
Cindy Levy, senior partner, on geopolitics
We think of geopolitics as being driven by the competing priorities of nations…industrial strategy, trade, security. Historically, its impact on the private sector has been relatively benign. But in the last few years, there has been a major break in trend as these disruptions seep into the challenges business leaders face every day. Dramatic, often swift changes in leadership in countries around the world; tariff disputes; and wars in Ukraine, the Middle East, and other regions have propelled geopolitics to become the number one issue for business leaders—and why we are launching our Geopolitics Practice now.
We’re helping clients manage three types of decisions, the first around opportunities to diversify growth including through expanding trade corridors. We are developing “playbooks” for eight to ten high-growth markets where we see opportunities for firms in payments and trade. We examine whether they have a strategy for individual countries. Are their payments infrastructure and coverage of people ready?
The second dimension is operations. Businesses must think strategically about where to put their supply chain, manufacturing facilities, their people, tech and data estate. To take one example, private equity firms with portfolios of over 100 companies must know where the materials in thousands of supply chains are coming from—and evaluate whether they need to diversify. Consumer companies are building digital twins of their manufacturing facilities so they can mimic geopolitical events that could cause disruptions, and scenario-plan accordingly.
The third is around corporate structure and risk. How should companies structure their geographic footprint? Where should they use joint ventures or separable full legal entities? Are scenario and broader risk capabilities sufficiently mature for the current global environment? All of these kinds of questions are coming our way.
Rodney Zemmel, senior partner, on the next stage of gen AI
Every company discovered gen AI at the same time—early 2023. The leaders set up the chairperson's task force; prioritized a set of use cases; developed policies; and ran a number of pilots.
Many are still steering these big portfolios of pilots. But those making money stopped this “pilot purgatory” mid-year, realizing that gen AI impacts every aspect of the organization. They changed from approaching gen AI “use case by use case.” Instead, they picked a business domain to focus on, approached it as a business problem, identified a financial target to deliver against, created reusable technology, and then spread that to other areas in the organization.
We saw gen AI applied most often to four areas: customer journeys; the coding and engineering of software; the creation of “concision engines” to process and assemble content; and the powering of virtual knowledge experts, like our own, Lilli.
The fifth area we will see this year is around gen AI agents. Many large tech companies are developing their own versions, and we’ll see them everywhere, starting with domains where units of work are well-defined and routine, like an IT helpdesk. Then, we’ll see it get into more ambiguous areas.
It's easy to create one agent. But once an organization has many agents working at once, it becomes much more complicated. The challenge will be how to orchestrate those groups, with a continuous learning loop built in. If 2024 was the year of augmenting different tasks with agents, 2025 will be about automating them.
Tania Holt, senior partner, on building inclusive workforces
The need for talent is one of the top three barriers for European business leaders when it comes to achieving competitiveness and growth.
Many face significant skills gaps that are hindering productivity. Their workforce doesn’t currently have the right level of skill; the organization hasn’t invested internally to develop them for the future; and they lack sufficient external service providers that they can easily tap into in a structured manner.
There is also a real need to broaden the overall talent base from which companies are recruiting. Right now, that pool is too small—and it is significantly underrepresented by people over 55 and women.
It is also substantially lower for ethnic minorities who represent roughly 10 percent of Europe’s population. We have estimated that this overlooked cohort, if fully engaged in the labor force, could add €120 billion a year to the European economy. Yet only 25 percent of the largest companies have a strategy today to reach them.
There is a lot of work to be done. The first and most complex challenge is for companies to understand their organizational data so they can see where to create more inclusive talent management policies. But this is challenging given varying regulations across European countries.
Our research shows that a very effective way to build an inclusive workforce is through employee resource groups where people can organize around specific communities they self-identify with. This makes a real difference.