The human advantage in an AI economy

Could AI transformation be exhausting humans rather than optimizing their performance? As artificial intelligence transforms how we work, organizations face a new challenge: ensuring people have the brain health and skills to cope with the cognitive demands of technology. On this episode of The McKinsey Podcast, McKinsey Partners Erica Coe and Kana Enomoto, and McKinsey Health Institute (MHI) Senior Fellow Jacqueline Brassey, speak with Global Editorial Director Lucia Rahilly about why brain capital is becoming a key competitive advantage in the age of AI—and what leaders can do to build healthier, more adaptable, and higher-performing organizations.

In the second half of this episode, McKinsey Senior Partner Shubham Singhal joins Lucia to answer a few audience questions from a recent McKinsey Live webinar on geopolitics and how it’s reshaping global trade.

The McKinsey Podcast is cohosted by Lucia Rahilly and Roberta Fusaro.

This episode has been adapted from our McKinsey Live webinar series.

The following transcript has been edited for clarity and length.

Why mental health is an economic imperative

Lucia Rahilly: Humans have already been through quite a bit of disruption in recent years. Your research estimates the global economy loses about 12 billion working days each year to mental health challenges. Talk to us about the context here and about what’s really at stake.

Erica Coe: Technology is promising productivity gains, but if we don’t have healthy and adaptable human brains, those gains won’t be realized. If we look at our current state, we have a lot of unaddressed disease burden. As you mentioned, we have 12 billion working days lost each year to mental health challenges, and that’s probably an underestimate.

We also have this value at stake because if we were scaling interventions that we know work, we would see $6.2 trillion additional global GDP. That’s the size of the gap in disease burden. With AI becoming more automated, we need to rely even more on things that are uniquely human: judgment, creativity, adaptability, and resilience. There’s a way to address this growing tension head-on. Just as we are asking more of our brains, we’re underinvesting in them, and people don’t feel they’re necessarily at their best to lean in.

What brain capital means in an AI era

Lucia Rahilly: Talk to us about brain capital—why it’s fast becoming an important concept in this AI era, including the relationship between brain health and the skills that folks need to thrive.

Erica Coe: The McKinsey Health Institute put out new research recently in collaboration with the World Economic Forum (WEF) and a number of other global partners. It talks about this framework of brain capital: the combination of brain health and brain skills. What is novel about this approach isn’t the concept itself, but that we look at both sides of the coin.

Brain health matters. We need that strong foundation to be able to learn new skills. You can’t cultivate skills that are becoming increasingly important with the rise of AI on a foundation of burnout or cognitive overload. You need both together.

The more society changes, the more important brain capital will become as a competitive advantage and as something worth investing in. We found that by recognizing brain capital as an asset that matters at an organizational and a societal level, we can start to make a difference. It gives us a way to think about both sides of the equation: how we protect and strengthen brain health while we develop the skills people need to thrive in a changing world.

Five levers to strengthen brain skills

Lucia Rahilly: Where should leaders focus their efforts most productively when thinking about brain capital?

Kana Enomoto: We partnered with WEF to better understand the science and the policy in this space. We published a report in January outlining a practical framework for strengthening brain capital in the age of AI. We identified five critical levers: safeguarding brain health, fostering brain skills, and then studying, investing in, and mobilizing to build brain capital.

While all five levers are important, the framework starts with safeguarding for a reason. Brain health is the foundation we all need to learn, perform, thrive, adapt, fall in love, and make friends.

To achieve lasting progress, we need better measurement, intentional synergistic investment, and coordinated action across sectors. This isn’t a private sector issue or a public sector issue. It’s not only a health issue or a commercial issue. We have to work together. Building brain capital requires contributions from employers, healthcare providers, educators, governments, built-environment investors, and communities.

We are increasingly seeing people pay attention to this issue and come together in important ways to galvanize the kind of change we need. In the last six months, brain capital has been discussed at Davos, the World Health Assembly, the G7, and the G20. This is a topic that is rising in the minds and the hearts of CEOs and global leaders alike.

Safeguarding brain health: Three actions leaders can take

Lucia Rahilly: Let’s get specific. What does it really mean to safeguard brain health?

Kana Enomoto: We identified three foundational actions that leaders, systems, and countries can take. The first is to promote healthy brain function and prevent brain health conditions or brain dysfunction.

Evidence shows prevention can and does work. For example, research suggests that about 85 percent of the global health impact of stroke is causally linked to modifiable risk factors such as high blood pressure, exposure to air pollution, unhealthy diet, sedentary lifestyles, and alcohol use. The US POINTER Study released in 2025 highlighted that benefits of combined lifestyle interventions are within reach for almost all of us.

The second action is to scale access to evidence-based treatment and services for brain health conditions. There are amazing advances in technology and science, and yet some of the most impactful interventions we already have access to are quite simple. We’re excited about the growing use of task sharing in both mental health and brain healthcare, where trained community workers and other nonspecialist providers can deliver evidence-based interventions to populations where they live, work, and play. Research shows this can substantially expand access to care in a wide range of geographies, economies, and settings.

The third action is to innovate, advancing the promotion of brain health and treatment for brain disorders. We need to understand better how we can promote mental and neurological health using precision medicine, public health, and social interventions. We need to understand how to prevent and treat disease in ways that are affordable, accessible, and effective. Equally important, innovation should be in partnership with the people and communities we aim to serve.

Lucia Rahilly: Let’s pull back a little bit. As you’re describing, human capabilities are rising in importance just at a moment when humans and our emotional and cognitive faculties are under unusual levels of duress. Jacqueline, talk to us about how leaders can navigate that tension to help their employees develop these increasingly vital capabilities.

Jacqueline Brassey: We see a paradox playing out. Leaders are managing so many complex demands and are racing to implement and scale AI. At the same time, employees are starting to burn out. AI increases cognitive demand faster than human capacity can keep up because work is shifting from execution to judgment. It’s less about doing the task and much more about interpreting, prioritizing, and deciding.

We see that in the data: One in two employees report exhaustion. Leaders often miss that the bottleneck usually isn’t the technology; it’s human capacity, and that shouldn’t be an afterthought.

You can think of it as value leakage. The wider the gap between what AI can do and what people can absorb, the more that AI value potential isn’t captured. The most forward-thinking leaders are asking themselves how work should be redesigned so that AI and humans can complement each other.

The goal is not to make AI more human, but it is to free people to focus on the things that humans do best. And that’s why we’re talking today about fostering brain skills and building brain capital: Organizations need to develop capabilities that allow people to work alongside AI and can create value that neither humans nor technology could generate alone.

Leadership skills for cognitive rewiring

Lucia Rahilly: Jacquie, you do tons of work with senior executives. If you were advising a CEO or a leader of a large team, what would “brain-positive leadership” look like?

Jacqueline Brassey: In our research, we use holistic health and burnout symptoms as a measure of brain strain. Your organization can track hot spots that need extra attention, and then you design around them.

We’ve defined five principles to design AI transformation in support of brain capital. The first one is about calibrating cognitive load: the demand side. It’s about designing what the brain is asked to do. As AI changes the nature of work, leaders should balance complex and cognitively demanding tasks with opportunity for learning and recovery and lower intensity work.

The second principle is about protecting cognitive capacity: the supply side. This is about protecting what the brain has to give. Both are correlated but have different perspectives. This is about ensuring people have sufficient opportunity for recovery and to build that into the operating rhythm.

Third is enabling focus: creating space for concentration, deep work, and sound judgment.

The next one is about building adaptive brain skills: continuously developing those skills that people need to thrive alongside AI, such as critical thinking, creativity, adaptability, and judgment.

The fifth principle is designing a brain-positive environment—both hardware and software. One misconception is that AI automatically reduces workloads, but often AI removes routine work while increasing the complexity of what remains. So the volume of work may decrease, but cognitive load can increase significantly. Leaders need to design actively for that reality, which means balancing cognitively demanding work with activities requiring less mental intensity, creating opportunities for recovery, and avoiding situations where employees spend their entire day making high-stakes decisions.

Lucia Rahilly: It sounds like cognitive sprinting all the time and how to manage for that. Let’s bring this to a close and end where we began: with value. Erica, leaders are in a tough operating environment. They’re under pressure. Why should they think about brain capital as an investment rather than an additional cost?

Erica Coe: For all the reasons we’ve talked through, it’s more natural and intuitive for organizations to be investing heavily in technology, infrastructure, and capital assets because those are tangible investments that directly drive performance. But brain health should be viewed through the exact same lens. We know it shapes performance. As Jacqueline was saying, we know human capability is the line definer right now, and if we’re not investing in growing it, performance will suffer and opportunities will be missed.

Our research shows there’s a huge ROI in mental health interventions. It’s also important that we remember this is much bigger than an investment in the workforce. This is a question of an individual thriving all the way to societal resilience, and it matters across ages. How are we investing in this concept of brain health and brain skills for ourselves, for our families, and certainly for our workforces?

SECOND SEGMENT

Keeping your head amid geopolitical churn

Lucia Rahilly: Shubham, during our recent McKinsey Live webinar about geopolitics, we received a number of questions that we couldn’t get to—so let’s address a few now. First question: Your MGI research shows that trade grew to record highs in 2025, even as geopolitical tensions reconfigured the shape of trade—its “geometry,” as you call it. We’ve heard so much about deglobalization. Is that what this is in your view, or is this simply a power shift?

Shubham Singhal: It’s important to understand that we don’t have deglobalization. Trade is still growing. What has changed is the geopolitical distance of trade, meaning countries whose foreign policies don’t align are trading less with each other. People need to plan around that.

Second, AI is, at a minimum, a big driver in the build-out of the infrastructure boosting globalization.

Third, countries are setting in place free trade agreements. Examples like EU-Mercosur and EU-India are trade deals that have been talked about for years and now are getting done.

Think about it as a rewiring of global flows, not a deglobalization agenda.

Lucia Rahilly: We have a question from an audience member on how AI factors into these changing geopolitical dynamics. Specifically, does AI have a democratizing effect on this new order, or does it simply create a new form of technological dependency?

Shubham Singhal: It is shifting every day and is contested. The short answer is: Nobody knows. Even before AI, two things were already happening. One, we were moving toward a China stack and a US stack for technology, and AI is following that pattern so far as well.

Second, we’re seeing more and more countries ask for data localization. There is a lot of discussion on open-source and open-weight models for AI. Those may not be dependent on any one stack ultimately. At this stage, though, things are moving much more toward siloed stacks. Beyond the US and China, the rest of the world will get to have a say, particularly as we get beyond this initial burst. As we get to open source and open weight, we’ll see where we land.

Lucia Rahilly: Here’s a question that picks up on the point you made about geopolitical distance. We hear so much about shifting supply chains to “friendly countries,” but that is obviously a big undertaking. It’s expensive. It can take years. How influential is geopolitical distance when it comes to the various categories of manufactured-goods imports?

Shubham Singhal: I’d say, first, the total of geopolitical distance doesn’t matter as much as the distance for your specific category.

At MGI, we have a report on what we call the Achilles heel. If you break down the totality of the imports that countries have, only 11 percent comes from geopolitically distant trading partners globally. For the US, that share is 13 percent. Of the US’s $3 trillion in imports, only 13 percent falls into that bucket.

Lucia Rahilly: Now, if you add what the report refers to as “dependencies”—national security, supply concentration, and geopolitical distance from trade partners—how are imports affected?

Shubham Singhal: If you added to that and said, are they also concentrated and are they critical to the US, that number falls to 5 percent. If you just looked at it from two dependencies—between critical geopolitically distant partner and strategic to the country—that’s 25 percent of the total or $750 billion for the US. Roughly, for the world, it’s in a similar zone.

One thing I’d say to executives is: First, understand whether your category fits that profile. If it does, governments will likely take action in the national interest to try to move supply to either friendly countries or onshore. And with that will come industrial policy. In fact, the industrial policy incentives have expanded in the EU and the US over the past several years.

As a business, you would lean into those and work with your government to figure out how to access those incentives. Those incentives make your business case of moving [supply chains] far better. And it’s not just financial incentives; we’re seeing accelerated permitting, making it easier to acquire land in many places in other countries.

All those industrial-policy incentives become ways to improve your financial case. If you’re not in that bucket, you should largely make your decisions based on where you’re going to be most competitive on an economic basis. Because countries are unlikely to prioritize moving supply chains involving T-shirts and handbag production. And then a third part is a lot of global companies, or at least those that operate in multiple markets with multiple production sites around the world, need to think about their global footprint or multicountry footprint, and how to use that to build resiliency, figuring out where you produce and where you ship.

And how you create your operations to be agile, to move faster to readjust as the realities change, also gives you resilience without adding cost.

Lucia Rahilly: Our data shows that the current realignment has been building for nearly a decade. Do you view these new trade and financial flows as secular changes or as cyclical movements?

Shubham Singhal: If it is in the national interest, you should assume it’s pretty secular. That’s at the country level. You can look at national interest by focusing on Achilles-heel categories, like semiconductors, rare earth magnets, biopharma, and others. If you’re in those areas, you should start to realign and understand that there is national interest that will move that and then, you know, kind of view this as durable.

Other areas will be more volatile, and so you have to design for being agile around them, more than structurally shifting your business.