Asia’s rise has been swift. Home to more than half of the world’s population, the region has climbed from low- to middle-income status within a single generation. By 2040, it is likely to generate more than 50% of world GDP, and could account for nearly 40% of global consumption.
New McKinsey Global Institute research shows the extent to which the global center of gravity is shifting toward Asia.
Today, the region has an increasing global share of trade, capital, people, knowledge, transport, culture, and resources.
Of the eight types of global cross-border flows, only waste is flowing in the opposite direction, reflecting the decision by China and other Asian countries to reduce imports of garbage from developed countries.
Asia now accounts for around one-third of global trade in goods, up from about a quarter ten years ago. Over roughly the same period, its share of global airline travelers has risen from 33% to 40%, and its share of capital flows has increased from 13% to 23%.
Those flows have fueled growth in Asia’s cities. The region is home to 21 of the world’s 30 largest, and four of the ten most visited.
Image: McKinsey & Company
And some of Asia’s lesser-known cities are now also on investors’ radar. In Yangon, Myanmar’s commercial capital, greenfield foreign direct investment (FDI) in knowledge-intensive sectors totaled $2.6 billion in 2017, up from virtually zero in 2007.
Similarly, Bekasi, a smaller city near Jakarta, has emerged as the Detroit of Indonesia – the center of Indonesia’s automotive and motorcycle industry. Over the last decade, FDI in the city’s manufacturing industry has…
