Korea’s next S-curve: A new economic growth model for 2040 - McKinsey & Company (Full Access)   

It has been a decade since McKinsey published its last Korea report in 2013. Referring to the report, McKinsey likened South Korea’s situation to being a “frog in a pot of slowly boiling water”, where the temperature of the water kept rising. In this context, McKinsey has written a new report to examine South Korea’s current macroeconomic situation, assess the path it could take for its next S-curve of growth, and paint a picture of the country South Korea could aim to be in 2040.

This article is a collaborative effort by Jaewon Hwang, Jinha Hwang, Sooyong Kim, Won-Mo Koo, Woosun Kyoung, Richard Lee, Jay Lim, Jeongmin Seong, Seungheon Song, and Youngwoo Song.

South Korea entered a low GDP growth rate of 3 percent in the 2010s, dropping to 2 percent in the 2020s, and losing its top-ten GDP status in 2022. Three aspects have contributed to this slowdown: labor, capital, and industry competitiveness.

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A force for good: Japan’s private equity opportunity - McKinsey & Company (Full Access)   

On the cusp of breakout growth, the Japanese private equity (PE) industry is an object lesson in the art of perseverance. After a long buildup, the industry has acquired the capabilities and competitive edge required to play a more prominent role in Japan’s financial landscape. But to complete the journey, industry participants need to take some final critical steps.

The private equity industry has faced several structural headwinds in its attempts to scale in Japan. These include historically lower levels of M&A and a cultural context in which businesses are often held by families or in tighter ownership structures. But that is starting to change, as shown by the recent $15 billion PE buyout of industrial giant Toshiba, one of the largest global PE deals in the past five years. To build on that foundation, the industry can play an important role—fostering understanding of the benefits of PE, promoting the interests of shareholders, and attracting new deals.

What has put Japanese PE on a more positive trajectory? First, higher volumes of capital are earmarked for longer-term risk-taking. In addition, the talent pool is expanding, enabling firms to engage more effectively with opportunities. Third, there is a sharpening focus on shareholder value, alongside the interests of managers and employees. Moreover, amid generally subdued public-market performance, more financial-market professionals and policy makers see PE investment as a way to enhance return on capital and boost labor productivity and competitiveness.

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Future-proofing health systems for climate risks and pandemics - McKinsey & Company (Full Access)   

The world has had a rude awakening when it comes to the vulnerability of its health systems. Infectious diseases such as COVID-19 and the impacts of climate change have strained health systems across the globe and demonstrated how unprepared the world is to respond to these growing threats. Climate disasters are increasingly and painfully commonplace. From 2018 to 2022, the United States alone experienced 18 weather and climate disasters that cost at least $1 billion each.1“U.S. billion-dollar weather and climate disasters,” National Oceanic and Atmospheric Administration, National Centers for Environmental Information, 2023. In the first ten months of 2023, there were 25 such events.2“U.S. billion-dollar weather and climate disasters,” National Oceanic and Atmospheric Administration, National Centers for Environmental Information, 2023. Climate impacts are also expected to worsen globally: from 2030 to 2050, an additional 250,000 global deaths related to climate change are expected per year.3“Fact sheet: Climate change,” World Health Organization (WHO), October 12, 2023. And unfortunately, COVID-19 wasn’t the last pandemic.4Matt Craven, Adam Sabow, Lieven Van der Veken, and Matt Wilson, “Not the last pandemic: Investing now to reimagine public-health systems,” McKinsey, May 21, 2021.

Just as these two threats are, in many ways, intertwined (for example, a warming planet is exacerbating zoonotic threats), so are their solutions. Health system climate adaptation and pandemic preparedness and response can help health systems respond to both threats. Yet while the financing needs for both climate adaptation and pandemic preparedness have been well documented, there is limited understanding of the overlap between these agendas.

New McKinsey research highlights that overlap: we have identified $7 billion to $25 billion in high-impact investments that could promote resilience against both climatic and infectious threats. About 25 percent of this investment can contribute directly to strengthening primary healthcare more broadly. In the context of global healthcare spending (which rose to $9 trillion in 2020),5Global spending on health: Rising to the pandemic’s challenges, WHO, December 2022. this relatively small investment could pay significant dividends in advancing pressing current and future health goals.

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Why the next decade in healthcare is India’s decade - McKinsey & Company (Full Access)   

India has emerged as a leader in the global pharmaceutical industry and the time has come for it to leverage its talent pool and cost advantages across the wider healthcare spectrum—say Pankaj Patel and Dr. Sharvil Patel while reflecting on their journey in scaling Zydus Lifesciences from an India-based generics player to a global leader in the healthcare sector with a presence in pharmaceuticals, consumer wellness, and hospitals.

Speaking with McKinsey’s Asia Chairman Gautam Kumra, the father-son duo discuss their vision for Zydus’ future, lessons learned from leading through the COVID-19 pandemic, and how businesses can build resilience in a rapidly changing world.

This interview has been edited for clarity and length.

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