Sternfels said the McKinsey Global Institute took a deeper look at the implication of restrictions and protectionism across industry verticals. It took a broader definition of trade — not just physical flows but also data flows and talent flows. “About two-thirds of today’s global growth comes from the Global South and that grows to 70% by 2050. So accelerating opportunities and growth is critical,” he said.
Sternfels noted that over the last couple of years, trade hasn’t been that resilient. “With exogenous shocks, we saw supply chains were pretty fragile. Diversification of trade and the multiplication of trade routes does a couple of things. One is it makes the world more resilient. And second is it drives economic growth that is particularly inclusive. So as you start to think about multiple trade routes as opposed to concentration of trade routes, there may be an answer here in inclusion but it does require reimagining.”
Talking further about the significance of inclusion, he added that there is an opportunity for India to move 220 million jobs from farm jobs to non-farm ones with a massive increase in wage escalation by 2047. This, he said, would also help arrest inequality, which is the number one global issue today.
Giving specifics, Sternfels gave the example of major economies and their respective income populations. “In the US, the middle class has shrunk by 18% in the last 20 years. Go to China – the top 10% of the income population have grown 50% faster than the bottom half. In India, that top 10% have grown 100% faster. So the data shows it. What this says is that we need to have economic growth. It is the catalyst that will help to solve all problems but that growth has to be inclusive,” he said. Speaking of SME growth around global trade finance, Sternfels said SMEs account for 95% of the firms and 70% of the jobs in the world today. They, however, are lacking in two aspects: access to credit and markets. “40% of applications for credit to SMEs are denied and SMEs face enormous barriers and trade.” Just easing the finance aspect and allowing SMEs to trade across borders will give them billions of dollars in value, he said.The global managing partner at McKinsey explained how accelerating technology can play a big role in achieving inclusive growth: “We did some work looking at the value of generative AI around 67 specific use cases. And it shows there is $3 trillion-$4 trillion in annual revenue available just in these 67 use cases.” Sternfels also spoke about their “Women in the Workplace” report, which showed that there was $12 trillion in economic value if gender parity was implemented. “That number accelerates to $28 trillion if you actually say women would play identical roles to men in enterprise. So $28 trillion of inclusive growth by solving gender access issues,” he said.
The Business 20 (B20) is the official G20 dialogue forum with the global business community. Established in 2010, B20 is known to be the most prominent engagement groups in G20, with companies and business organisations as participants.
