The rise and rise of the global balance sheet: How productively are we using our wealth?
Net worth has tripled since 2000, but the increase mainly reflects valuation gains in real assets, especially real estate, rather than investment in productive assets that drive our economies.
By Jonathan Woetzel, Jan Mischke, Anu Madgavkar, Eckart Windhagen, Sven Smit, Michael Birshan, Szabolcs Kemeny, and Rebecca J. Anderson – We have borrowed a page from the corporate world—namely, the balance sheet—to take stock of the underlying health and resilience of the global economy as it begins to rebound from the COVID-19 pandemic. This view from the balance sheet complements more typical approaches based on GDP, capital investment levels, and other measures of economic flows that reflect changes in economic value. Our report, The rise of the global balance sheet: How productively are we using our wealth?, provides an in-depth look at the global economy after two decades of financial turbulence and more than ten years of heavy central bank intervention, punctuated by the pandemic.
Across ten countries that account for about 60 percent of global GDP—Australia, Canada, China, France, Germany, Japan, Mexico, Sweden, the United Kingdom, and the United States—the historic link between the growth of net worth and the growth of GDP no longer holds. While economic growth has been tepid over the past two decades in advanced economies, balance sheets and net worth that have long tracked it have tripled in size. This divergence emerged as asset prices rose—but not as a result of 21st-century trends like the growing digitization of the economy.
Rather, in an economy increasingly propelled by intangible assets like software and other intellectual property, a glut of savings has struggled to find investments offering sufficient economic returns and lasting value to investors. These savings have found their way instead into real estate, which in 2020 accounted for two-thirds of net worth. Other fixed assets that can drive economic growth made up only about 20 percent the total. Moreover, asset values are now nearly 50 percent higher than the long-run average relative to income. And for every $1 in net new investment over the past 20 years, overall liabilities have grown by almost $4, of which about $2 is debt. more>
Posted in Business, EARTH WATCH, Economy, Education, History, How to, Net, Regulations, Technology
Tagged Business improvement, Capital, Industrial economy, Leadership, McKinsey, Skills, Technology, Wealth
When agile marketing breaks the agency model
The journey to agile marketing can be hard. But for many marketers and agencies, it offers the opportunity to forge a better partnership.
By Clay Cowan, Jennifer Ellinas, and Rachael Schaffner –
- Agile marketing teams can deliver real business value for an organization.
- But agile transformations can be challenging and place outsized strain on a marketing group’s agency relationships.
- The most successful agile marketing teams are doubling down on sound agency management practices, including approaches to scopes of work, fee arrangements, improved operating model, talent and culture, and metrics./li>
Marketing leaders are increasingly turning to agile methodologies to help improve the speed and performance of their teams along with the many partners they use for creative, production, and measurement expertise. In our experience, though, the shift to agile is often far from seamless for these constellations of teams. Our recent survey of marketing executives found that only 3 percent characterized their transition to agile marketing with their partners as “smooth,” while more than 80 percent reported the journey to be filled with obstacles.
Managing multiple external partners can already be complicated in a traditional marketing department, and it’s an understandably significant shift to borrow operating methodologies from the IT world. Compounding that challenge is the fact that marketing requires engaging with so many more types of third parties, which include measurement, platform, and publishing partners. Google, Twitter, Facebook, and LinkedIn were mentioned by 40 percent of the executives as being among the additional partners they coordinate with today.
It’s no wonder, then, that when switching to agile methods, marketers often struggle with how best to involve their external partners and other third parties in their transformation. The result can leave some professionals feeling that agile marketing broke their agency model. more>
Posted in Business, Economy, Education, History, How to, Net, Technology
Tagged Business improvement, Internet, Jobs, McKinsey, Productivity, Skills, Technology
Moving beyond agile to become a software innovator
Companies need to borrow a page from the tech industry’s playbook to understand how to use agile to build better products and experiences.
By Santiago Comella-Dorda, Martin Harrysson, and Shivam Srivastava – t the end of the movie The Candidate, Robert Redford is sitting in a hotel room surrounded by cheering staffers after his character has won the election for the US Senate. Looking a little perplexed and forlorn, he turns to his advisor and asks, “What do we do now?”
Many executives who have led their businesses through successful agile programs can probably relate to Redford’s character. They have overseen sizable improvements in software product development thanks to agile; our Developer Velocity research shows that adoption of agile practices at the team level can be one of the most critical dimensions for companies that are in the early part of their journey.
But many of these businesses have run into a ceiling where incremental gains are minimal. The same Developer Velocity research, for example, showed that while third-quartile companies in terms of overall software-development performance scored 41 percent higher on agile practices than fourth-quartile companies, the differences between companies in the first and second quartiles dropped to less than 20 percent. In other words, once a business hits a certain level of excellence, improvements to how teams work in agile alone drive diminishing returns.
For companies that have realized many of the initial gains from adopting agile, there are valuable lessons to be learned from how tech companies develop products. The industry’s intense competition and pace of change have forced tech companies to develop a set of capabilities that take the fullest advantage of agile, of which the following are the most important:
- grounding every decision on customer value through world-class product management and experience design and adopting an operating model built on products and platforms
- creating a software-engineering culture that nurtures and celebrates technical craftmanship, empowers teams, and provides them with high levels of psychological safety in addition to supporting developers with automation and world-class tools
- embedding data and analytics at every level of product development
Posted in Business, Economic development, Economy, Education, History, How to, Net, Technology
Tagged Agile, Business improvement, Internet, McKinsey, Productivity, Skills, Technology