2023: The year in charts

Our Chart of the Day series offers a daily data visualization that helps explain a changing world—as we strive for sustainable, inclusive growth. Here, we’ve curated 23 of this year’s best charts. They cover many of the key themes and trends that organizations have had to grapple with: AI, economic uncertainty, the escalation of geopolitical risks, inclusion in the workplace, climate change, and more. The following data visualizations help tell the story of 2023—and what leaders might be puzzling through in years to come.

Leading through uncertainty is the new normal

Although the COVID-19 pandemic has lessened as a major global threat, leaders must still navigate a set of unprecedented challenges, from economic headwinds to geopolitical instability to shifting workplace norms. Amid the growing uncertainty, opportunities still emerge for the bold.

CEOs kicked off the year with a unique set of challenges. According to our CEO Excellence survey from early 2023, three themes emerged as top of mind: disruptive digital technologies (covered in the next section of this feature), the economy, and geopolitics. Perhaps this is not surprising, as generative AI, the war in Ukraine, and economic uncertainty all loomed large. Leaders planned to tackle these areas by developing AI technologies, creating resilience in supplier networks, and reducing operating expenses, among other tactics. CEOs also ranked talent, ways of working, and climate change as key areas of action.

Top CEOs identify disruptive technology, the economy, and geopolitics as the most important trends to act on in 2023.

By July, inflation presented a mixed picture for the global economy. In the United Kingdom, for example, core inflation hovered at 6.9 percent. In India, official headline inflation jumped from 4.9 percent in June to 7.5 percent in July, spurred mainly by mounting food prices. The US economy showed some resolve, despite a slight increase in the consumer price index (from 3.0 percent in June to 3.2 percent in July) and even though core inflation nudged only slightly downward (from 4.8 to 4.7 percent) during that time. Although consumer spending in the United States had contracted compared with the previous year, consumer confidence reached its highest level since July 2021.

The consumer price index ticked up to 3.2 percent in July. Energy and food prices remain major inflationary contributors.

The war in Ukraine continued to destroy lives and livelihoods and alter economic patterns worldwide. Multiple disruptions could endure, including an increase in defense spending among many European and NATO countries. Our analysis in July revealed that countries closest to Russia and Ukraine, such as Estonia, Lithuania, and Poland, showed the steepest rise. In addition, some NATO countries that are less proximate announced plans to meet the defense-spending target of 2 percent of GDP over a longer timeline. Some disruptions had eased, including spikes in prices and supply disruptions for food, metals, and minerals.

Following the invasion of Ukraine, defense spending accelerated in most border and former Eastern bloc countries.

Workers were worn out this year. Around the globe, employees showed symptoms of burnout, especially fatigue. According to a McKinsey Health Institute survey, approximately 20 percent of workers are experiencing burnout. In 29 out of 30 countries, more than a third of surveyed workers reported experiencing exhaustion in particular. Workplace interventions such as leadership trainings and flexible working policies can help offset some of the work demands that often can lead to burnout, and potentially improve employees’ holistic health. Leaders who enable a thriving workforce may find their companies better positioned to navigate tumultuous times.

Although the global level of burnout is around 20 percent, cognitive and emotional impairment, exhaustion, and mental distance vary by country.

Is the flexible workplace here to stay? Since the COVID-19 pandemic, about 90 percent of organizations have embraced a range of hybrid work models. However, most companies have only scratched the surface of the opportunities surrounding flexible work, including better employee experience, real estate cost savings, and more sustainable operations. For example, according to our survey of real estate and employee experience executives, nearly all respondents agreed that their organizations have created systems to gather employee feedback on the workplace experience. However, nearly half of companies aren’t using advanced analytics to synthesize information such as mobility patterns, demographics, and employee perceptions.

Survey results show that most companies address the basics when it comes to hybrid work, some have advanced further, and few have completed all steps.

Demand for office space in many major cities has declined, as employees have moved out of urban cores and continue to work remotely coming out of the pandemic. Converting available office space into residences sounds like a logical solution, but it’s easier said than done—and may have its limits. Our research on the pandemic’s lasting impact on real estate reveals that if all vacant office buildings in certain global cities were converted to residential space, available housing would increase by only 3 percent. Cities and real estate leaders could adapt to this new era of empty spaces and hybrid places by developing mixed-use neighborhoods, constructing more adaptable buildings, and designing multiuse office and retail space.

If all excess office space was converted into residences, housing stock in superstar cities would grow by less than 3 percent.

Asia has emerged as the world’s manufacturing and trade hub. When considering the world’s 80 largest trade routes, for example, Asia accounts for more than 50 percent of the value of global trade. The region is also home to 18 of the 20 fastest-growing corridors. Asia is not a monolith, as the region features enormous cultural, linguistic, and economic diversity. Still, Asia could mobilize more capital between now and 2030 than any other region in the world.

Asia has become the world’s largest economic and trading region.

AI takes center stage

Generative AI received outsize attention this year, but it’s still just one of several technological advancements that could catalyze significant change across both business and society.

Generative AI captured the world’s collective attention in 2023, as applications that generate images, text, videos, and more became widely available for public use. Businesses across sectors have rapidly adopted the technology, which has already started to transform roles from sales to software development. Since up to 40 percent of workers’ tasks today involve an understanding of natural language, jobs involving communication and documentation have significant automation potential with generative AI tools. The technology could accelerate the transformation of work in areas such as education and office support.

Advances in AI’s technical capabilities could have the most impact on activities performed by educators, professionals, and creatives.

The pandemic disrupted the US labor market dramatically, from hybrid work to workers changing jobs at a remarkable pace. As organizations continue to find their footing, many leaders are exploring how the use of generative AI will affect their workforces. Roles in healthcare and STEM fields, in particular, were resilient during the pandemic and could see notable job gains within the next decade, even with moderate levels of automation. Some positions, such as those in customer service and office support, could undergo significant changes in labor demand as a potential result of incorporating generative AI technology.

While STEM, healthcare, builders, and professional fields continue to add jobs, generative AI could change work activities significantly for many occupations.

A tech talent shortage was unabated despite ripples of layoffs in the early part of this year. Industries seeking to attract tech talent had to look beyond compensation. Many digital workers have shifted priorities and rank career advancement potential and workplace flexibility among their top reasons for staying in their current roles or moving on to new opportunities. Some companies may be reluctant to invest in career development for digital talent because attrition for these roles tends to be higher than for others. But investing in the right types of career development programs could help retain workers over the long term.

Generative AI and other automation technologies have gained widespread use across sectors. As a result, technology-related job postings soared, growing by 15 percent between 2021 and 2022. In contrast, global job postings overall declined by 13 percent during that time. To keep up with digital demands, companies have continued to hire in fields including applied AI and next-generation software development. Organizations posted nearly one million positions for those specialties alone from 2018 to 2022. The shortage of qualified talent was a persistent limiting factor for growth in many high-tech fields, our research showed, including in AI, quantum technologies, space technologies, and electrification and renewables.

Job postings for fields related to tech trends grew by 400,000 between 2021 and 2022, with generative AI growing the fastest.

At an estimated value of $500 billion and growing, the space economy could be set for liftoff. The commercial business case for executives to make space part of their strategy has never been stronger. Companies today use satellites for everything from data collection and analysis to credit card authorization to remote management of warehouse inventories. What’s more, satellite launch costs have dropped by 95 percent in recent years as satellites become smaller and less expensive. That means companies can capitalize on improved cost performance over time, often at even greater rates than seen with other technological developments.

Satellites have rapidly improved their cost performance compared with many other technologies.

Is the sky the limit for drone delivery? In some regions where pooling deliveries isn’t practical, drones are already considered the most cost-effective delivery mode. As companies explore more economical ways to meet delivery demands, drones may provide an attractive option. The technology is more environmentally friendly than certain traditional delivery methods: CO₂ emissions from drones are lower than not only gas-powered vehicles but also electric cars and vans making a single delivery. Drone technology may be particularly suitable for various last-mile consumer use cases, such as convenience products, prepared foods, and medical samples for labs.

Drones could become cost competitive with other transport modes.

Supporting inclusion takes work

Communities and economies are stronger when opportunities are accessible to all. Organizations across the globe continue to work toward meaningful progress in achieving growth that is sustainable and inclusive.

There continues to be an opportunity to improve economic mobility for Black people. Take jobs in technology, for example. Although Black people comprise 12 percent of the US workforce, only 8 percent of employees in tech jobs are Black. The percentage is even smaller higher up the corporate ladder; only 3 percent of technology executives in the C-suite are Black, and that gap is likely to widen over the next decade. Businesses, not-for-profit organizations, and public sector agencies could take coordinated action to boost Black representation in tech by building up talent pipelines for STEM students, replacing mentorship with sponsorship, and providing better support for Black leaders.

Black talent is underrepresented in the fastest-growing technical roles.

Women have made significant strides in the climb to the C-suite, but their hard-earned gains are tenuous; corporations have a long way to go to achieve gender parity. According to this year’s Women in the Workplace report, women saw modest gains in C-suite representation, with an increase of 11 percentage points since 2015. But at manager and director levels, representation grew only three and four percentage points, respectively. Progress for women of color lags behind that of their peers: at nearly every step in the corporate ladder, the representation of women of color falls relative to White women and men.

Women’s representation saw modest gains throughout the corporate pipeline, but women of color remain underrepresented.

Many corporate leaders have embarked on the quest for improving gender diversity, but it could take decades to achieve global gender parity in some areas—such as private markets. As with other corporate sectors, the issue of diverse representation in private equity firms is most apparent in more senior-level positions. At the current rate, it could take 60 years to reach gender parity at the managing director level in investing roles. There’s more hope for the pipeline of future leaders, however: for entry-level roles, such as analysts and associates, the industry could achieve gender parity in ten years.

Depending on the level, global gender parity in investing roles may take multiple decades to achieve.

As cities across the United States grapple with homelessness, San Francisco represents both the extent of the crisis and the potential for progress. According to McKinsey research, it’s common for individuals who experience homelessness to do so in a cycle. For instance, the 20,000 people in San Francisco who experienced homelessness in 2022 might have found themselves entering, exiting, and reentering a complex maze of shelters, services, and programs that vary not only in size, scope, and approach but also in effectiveness. Three strategies to potentially break the cycle include bolstering housing affordability and income security, improving coordination among agencies in the response system, and investing in intensive care pathways.

An estimated 20,000 individuals experienced homelessness in San Francisco in 2022.

Net zero reaches a critical juncture

While the net-zero transition is moving forward, it isn’t happening fast enough. A significant acceleration of efforts to develop and deploy climate technologies, as well as more investment, will be needed to stave off the most severe effects of climate change.

Even though addressing climate change is top of the agenda for many G-20 economies, progress has been elusive. The G-20 nations, which emit approximately 31 gigatons of CO₂ a year, need to do far more to get on track to meet their goal of cutting greenhouse gas emissions by 50 percent by 2030 and reaching net zero by 2050. According to McKinsey analysis, hitting these targets would require an additional $35 trillion of investment this decade. Much of that investment will need to be made up front to successfully transform the world’s energy and land use systems.

G-20 economies need to reduce CO₂ emissions substantially to meet 2030 goals.

The urgency to reach net-zero targets has increased in many markets. Scaling a set of key climate technologies could help businesses and governments meet their goals, but the task looks steep. Solar power, for example, would need to scale by a factor of 14 by 2030; green hydrogen by a factor of 200. Yet the challenge presents a significant growth opportunity for companies—McKinsey analysis shows that growing demand for net-zero offerings could generate $9 trillion to $12 trillion of annual sales by 2030. Leaders can look to build green businesses around climate tech through cross-sector partnerships, getting ahead on skills shortages, and exploring different avenues for financing, among other moves.

To reach net-zero targets, a set of existing climate technologies would need to scale exponentially by 2030.

There’s increasing evidence that a robust workforce will be needed to accelerate the energy transition. For example, the European Union could be poised for a clean-energy jobs boom. Reaching the goal of a 45 percent share of renewables in the European Union’s energy mix would require a massive redeployment of labor. Almost one million full-time skilled workers, more than triple the number needed today, would be required by 2030 just to develop and construct centralized renewable-energy assets.

Demand for workers to develop and construct wind and solar assets in the European Union is set to increase by a factor of three to four by 2030.

The effects of the US Inflation Reduction Act (IRA) have started to take shape on the renewables market. The IRA now has the potential to increase solar, storage, and onshore wind capacity 2.7 times faster than projected before the law took effect. But reaching that goal would mean overcoming significant construction and labor shortages that could worsen over the next three to five years. At stake is an estimated $700 billion to $800 billion in capital investments to build onshore wind and solar projects through 2030. To deliver on these projects, renewables players could establish new approaches to partnerships, risk ownership and contracting, workforce development, and digital and technology adoption.

The built environment has emerged as an important area for climate solutions. Homes, offices, factories, highways, and other infrastructure related to the built environment are responsible for more than one-quarter of all greenhouse gas emissions. One key change with strong abatement potential would be switching from space and water heaters to heat pumps, which can reduce emissions from the built environment by about 60 percent.

Most operational emissions in multifamily homes are caused by water and space heating.

Electric vehicles (EVs) continued to be crucial to the net-zero transition. EVs accounted for about 8 percent of all new passenger cars sold in the United States in 2022. By 2030, that figure could jump to 53 percent. However, more EVs on the road means more charging infrastructure. By the end of this decade, 28 million ports will be needed in the United States to meet the increased demand for battery juice.