Is progress behind us, or is ‘plenty’ still possible?

0:01Sven Smit: The world has advanced so much in the past 100 years, from electrification to global trade to unprecedented scientific breakthroughs. Can it achieve another century of progress? That's the focus of a new book and podcast, both called A Century of Plenty, from the McKinsey Global Institute, or MGI. When you look back at it, what you see actually happen was this stunning century of progress. but totally unfinished business. And in fact, MGI Research says we're almost exactly halfway towards empowering the world. That's Chris Bradley, a McKinsey senior partner and co-author of the book, A Century of Plenty.

0:42Sven Smit: So what exactly remains unfinished? And what does it mean to have plenty? That's what we'll hear about in today's episode. This is the McKinsey Podcast, where we help you make sense out of the world's toughest business challenges. I'm Roberta Fasaro, your host for today.

1:07Nick Leung: We got a question from somebody who was a former managing partner in McKinsey, Ian Davis, who said, you know, what have you learned about the past 100 years in the McKinsey Global Institute? And we, I think, collectively said we learned a lot.

1:20Sven Smit: That's the genesis of the new MGI book, according to Sven Smed, a senior partner emeritus at McKinsey, and one of the co-authors. He and Nick Leone, another co-author and a senior partner at McKinsey, say it's important to look back in order to help define the future. Among the lessons...

1:40Marc Canal: Well, there's this, there's the global balance sheet, there's the empowerment work, there's all these different things that have been researched now over the last few years.

1:48Sven Smit: We're just in this time, everyone feels it, of just epic change, like where's geopolitical change, we've got AI, we've got demographics, we've got all these things coming at us. But it's a confusing kind of change without a narrative. And how this transformation can result in plenty is what the book and related podcasts explore. Like what will it mean for people to acquire enough energy, food, metals, innovation, and the environmental protection to help make prosperity physically possible? Here's Mark Canale, McKinsey's senior partner and another co-author of the book. To me, plenty also means more.

2:29Chris Bradley: It means abundance. So it's not just, we describe plenty and we've been talking about plenty here as the results, right? As the outcomes, like living better lives and all this. But also, like the way to get there is an abundance of like building housing, building energy, building more stuff, right? At the end of the day, it's about more. And this concept sometimes can be, you know, tricky for people. like do we need more? But actually, like for example, getting affordable housing, getting affordable energy, it means actually building more of it.

2:57Sven Smit: Sven agrees and says, while building more is the goal, we have to acknowledge that large swaths of our world population live in poverty.

3:06Nick Leung: For most of people, plenty, which you could define in the book we jokingly use Switzerland as, you know, a wealth perspective that everybody should go. But the majority of the world is so far away from that. I always have this image of a farmer in Kenya that just needs a water pump to go from mist harvest to fertile harvest. 50 bucks. For 50 bucks. So we know it's technically possible. We just need to get it done.

3:32Sven Smit: It won't be easy. But Mark says it's possible. And that our best days are not behind us.

3:38Chris Bradley: Looking at history, if they had said it the same thing at any point in the last 100 years, almost like they would have been so incredibly wrong that only just from that perspective on empirical grounds right it's it's crazy to think this way right um also i would say if you look at what we have like the amount of technology the amount of like we have more um educated people than ever before like the more brains than ever before um it's also hard to hard to believe and you know like i would just not never bet on human against human ingenuity i think that uh it's the worst bet.

4:14Sven Smit: Nick also points to civilization's history of continuous improvement.

4:19Marc Canal: But when you step back to it 100 years, you actually see the pattern of overcoming those challenges through ingenuity, through engineering, through the things that humanity has come up with. And again and again, you look at it, it's like over how many centuries, each of the last three centuries, we accelerated human progress.

4:38Sven Smit: At the end of the day, the authors feel hopeful about the future and say,

4:42Marc Canal: Growth is good.

4:43Chris Bradley: It starts with a new narrative.

4:46Marc Canal: We always think about it as something that is done to us. Whereas I think what the book proves is that it's there and it's up to us, the next generations, to make it happen.

4:57Sven Smit: On that positive note, AI might be just the tool that next generations need to launch new ideas and another century of progress. I spoke with Sven about AI's role in research and why it pays to be optimistic about AI. AI is changing the speed and scale at which we create content. What are the pros and cons of that?

5:22Nick Leung: So I think, you know, in general, AI is for the good, but we need to pay attention to some of the risks that might occur. You know, is the quality good enough? Are strange things happening on platforms that maybe are not as truthful and as a result create disorganization. I think the most persuasive thing in life is fear. And I think while there was fear when farming got automated by tractors and other machinery or when factory work got automated by bigger machines and robots as on, to some degree, it was a bit different than when the thing thinks or is supposed to think. We can have a long debate whether what it does is thinking or not.

6:05Nick Leung: And it really depends on where you are in terms of what the world will do in 100 years, whether you believe the AI is actually a real threat or just a bit more free time and lots more good stuff for people.

6:17Sven Smit: McKinsey's always been associated with big ideas. Do big ideas still matter in this era of LLMs?

6:24Nick Leung: I think there's a huge difference between big ideas and good big ideas. I think the LLMs are very good to catalog what is already out there. In my view, it does often with a bias to the majority. And if we know the structure of human discovery, most of the biggest ideas were not mainstream. And so since these LLMs are trained on the mass, it's an interesting question how do you get an LLM to be contrarian. That's what I do when I play with them. I always ask them, give me the alternative. People know me like that, but I always ask, give me the alternative to this question. And the opposite, actually.

7:00Nick Leung: And then see what's the proof of the opposite, which is a helpful tool to get to better ideas. I think the LLMs will not come with the answer to our current world order. That's going to be an interaction between humans and the LMs could have all kinds of data points. But at the end, humans are going to say this is how the game is played. I never liked artificial intelligence as the word. I liked intelligence assisted.

7:20Sven Smit: There's a lot of noise out there with AI, a lot of stuff that's coming, data coming in, where's the garbage in, garbage out. How can researchers, executives ensure that they're getting the right data?

7:32Nick Leung: If I look at some of the major research pieces we've done so far, I would say in 80 % of the cases, the data that we use is not available to the AIs because they either sit in some proprietary database or their newly created set of data, or they are embedding a lot of knowledge that's in the human brain and the expertise needs to come out and then apply to the data i really also like to play the game which is called my game's trap the ai on the contrarian view which is you ask for plenty asked what energy mix would we have in 2100 it says 100 solar okay so did you do that on what's called levelized cost equivalency or did you do that on levelized system cost including the grid no subsidies blah blah blah blah and And the answers are completely different, which does mean that, which I think has always been the most important thing in strategy, is to ask the right question, is getting to the right answer.

8:23Nick Leung: And I can basically, on the same topic, get two completely different answers on a very small modification.

8:29Sven Smit: We talked a little bit about how there's some fear associated with that, right? The pessimism and optimism that naturally occurs when there's change. How do you think about that?

8:39Nick Leung: We now live in a society where we somehow have told the world that it's going to be worse or at least not much better. While enormous amount of catch-up growth is happening and has happened in Africa and India and Indonesia and so on, and the poorest in our countries are getting better. Yes, the inequality gap and so on. I can make a long list of issues, but it can't be that the sum total of the issues is heavier than our progress. And for some reason, we're talking ourselves into a ditch, which is totally unnecessary in my view.

9:09Sven Smit: How do you combat the narrative?

9:10Nick Leung: I understand you being pessimistic. if you actually fundamentally believe it can't get better, then you're going to batten down the hatches and try to divide and conquer. And so what I'm doing is I have lunches with young people, also with older people, the same thing, and I just say it out loud. And increasingly, it's being received as a positive counterpoint in complex times. If that happens, I'm very happy because then we're at least debating the possibility of progress. Which progress we then want, blue, orange, purple, we'll see. And how we exactly do it and who participates in what way, we'll see.

9:44Nick Leung: But if we stop discussing the possibility of progress, we are in a really odd place.

9:50Sven Smit: Thanks so much for listening to the McKinsey Podcast. I'm Lucia Raheli. And I'm Roberta Fasaro. Find us on McKinsey.com. We'll have a transcript of this episode up shortly. And download the McKinsey Insights app where you can find this podcast and other helpful content updated daily. If you enjoyed the show, we'd love for you to leave a rating and a review. We'll see you next time.