Technology will drive the 12 major growth industries of the future and stem from some of those we already have today such as consumer internet, software and video and entertainment. McKinsey Global Institute calls them "arenas", as each of these subsets of tech will be worth trillions in revenue in their own right as the human race invents and innovates into the middle of the 21st century.
Global consulting firm McKinsey analysed a comprehensive data set of the world’s 3,000 largest companies from 2005 to 2020 and pinpointed 12 arenas of competition today that include: Software, semiconductors, consumer internet, e-commerce, consumer electronics, biopharmaceuticals, industrial electronics, payments, video and audio entertainment, cloud services, electric vehicles (EVs), and information-enabled business services.
Together, these 12 future arenas could reshape the global economy and are projected to generate somewhere between $29-48 trillion in revenues by 2040.
The e-commerce arena for instance, currently worth US$4 trillion, could blow up to be worth about $14-20 trillion in the next 15 years.
And, assuming they have profit margins after taxes that are typical of similar industries today, they could generate $2-6 trillion in profit by 2040 with a collective global GDP share of 4% today and 10-16% by 2040.
A handful of these arenas are just technological progressions of industries themselves. For instance, banking has become payments, pharmaceuticals have turned into biopharma and retail has now been overtaken by e-commerce.
The 12 arenas had a revenue compound annual growth rate (CAGR) of 10% and market capitalisation CAGR of 16%, tripling their share of global GDP from 3% to 9% in 15 years.
Spun off from those arenas and McKinsey identified a total of 18 future arenas ranked by projected market cap that will carry weight in their own right by 2040 and can be categorised into three groups: Continuing arenas, Spin-off arenas and emerging arenas.
Continuing arenas
E-commerce Companies that sell goods through digital channels and fulfill them directly.
Electric vehicles Manufacturers of battery, plug-in hybrid, and fuel-cell EVs.
Cloud services Companies that deliver on-demand cloud infrastructure and platforms as a service.
Semiconductors. Designers and manufacturers of semiconductors, microchips, and integrated circuits as well as providers of tools for semiconductor manufacturing.
Spin-off arenas
AI software and services (spin-off from software). Companies that provide software and services incorporating AI, excluding the hardware necessary to operate AI.
Digital ads (spin-off from consumer internet). Platforms that enable advertisers to reach consumers digitally.
Streaming (spin-off from video and audio entertainment). Providers of on-demand video entertainment over the internet.
Emergent arenas
Shared autonomous vehicles Operators of shared autonomous vehicle services
Space Providers of space-related infrastructure and services to the commercial and state-sponsored segments.
Cybersecurity Companies that provide protection for computer systems from unintended and unauthorised access, modification, or destruction.
Batteries Manufacturers of rechargeable batteries used for EVs and other technologies that are mostly linked to the energy transition.
Video games Producers and distributors of games played on dedicated consoles, PCs, and mobile phones.
Robotics Manufacturers of robots and providers of robotics solutions.
Industrial and consumer biotechnology Providers of biotechnology-enabled products in markets like agriculture, alternative proteins, biomaterials and biochemicals, and consumer products.
Modular construction Companies that operate in the modular construction value chain, from design to assembly, with volumetric modules.
Nuclear fission power plants Players that construct nuclear fission power-generation facilitiesFuture air mobility. Operators of air mobility transportation services, such as electric vertical takeoff and landing vehicles (eVTOLs) and delivery drones.
Drugs for obesity and related conditions Companies that sell glucagon-like peptide-1 (GLP-1)drugs and other treatments for obesity and related conditions, such as diabetes.