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The industry outlook for 2024: A leader’s guide

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ESSENTIALS FOR LEADERS AND THOSE THEY LEAD

Brought to you by Liz Hilton Segel, chief client officer and managing partner, global industry practices, & Homayoun Hatami, managing partner, global client capabilities

Another year, another set of opportunities and challenges for leaders in all sectors of the globe. It seems that uncertainty and disruptions are here to stay, but there are also reasons to be hopeful about the world economy. The same is true for individual industries, all of which are subject to broader macroeconomic forces as well as sector-specific trends and conditions. We’ll check in with four major industries—healthcare, financial services, energy, and fashion—about their prospects in 2024.

AN IDEA

An image linking to the web page “What to expect in US healthcare in 2024 and beyond” on McKinsey.com.

Here’s to your health

As New Year’s resolutions go, building healthy habits is a popular one. Dust off your gym membership, eat more greens—whatever might help you transform into a better version of yourself. The healthcare industry in the United States, which accounted for 41 percent of the world’s healthcare spending in 2021 , is no stranger to transformation. After a challenging few years of fluctuating demand, high inflation, and labor shortages, the outlook for both healthcare providers and payers seems brighter. McKinsey senior partner Shubham Singhal and his colleague foresee meaningful growth opportunities in several segments between now and 2027. At the same time, US healthcare leaders must manage a range of cost pressures and macroeconomic uncertainties while continuing to innovate and improve the well-being of their patients and members.

A BIG NUMBER

€3,800

That’s how much a bank could save by acquiring just one new customer through a qualified lead rather than on its own. According to McKinsey’s Leorizio D’Aversa , Harald Kube , Brian Ledbetter , and colleagues, external partnerships will become increasingly invaluable—and value-creating—to banks that are constantly competing with the clock. “Customers are demanding personalization and intimacy,” Sabrina Dar of Mambu, a banking technology firm, tells McKinsey. “They don’t want to tell you more than once who they are or what services they require. And they want speed.” Enter embedded finance: the placement of financial products or services in nonfinancial platforms, applications, or customer experiences. Instead of trying to build everything themselves, some banks would do well to play to their strengths and, with a little help from their friends, create an integrated experience.

A QUOTE

“Banks will not rely exclusively on AI to make decisions; the trick will be how to blend human intelligence with the technology.”

That’s McKinsey senior partner Ishaan Seth reflecting on his discussions at the World Economic Forum’s annual meeting last month. Unsurprisingly, generative AI (gen AI)—and the opportunities it presents for the banking industry—was a ubiquitous topic of discussion. But in such a heavily regulated sector, Seth notes a few key questions that banking leaders must ask themselves. “For example, do you allow the algorithm to pull data from myriad sources first, or do you feed it with internal bank-generated data and then figure out what the outside world can do to supplement that?”

A SPOTLIGHT INTERVIEW

An image linking to the web page “Forward Thinking on the tricky business of removing carbon from our world with Nan Ransohof” on McKinsey.com.

Last fall’s COP28 conference hosted a record number of delegates, including more than 700 CEOs. Public and private sector leaders made a range of pledges to realize the net-zero transition , including a commitment from the world’s biggest producers of nuclear energy to triple capacity by 2050. Yet despite the momentum, it’s still very difficult to finance the energy transition . In an episode of McKinsey Global Institute’s Forward Thinking podcast, Michael Chui discusses the financing challenge with Nan Ransohoff, head of climate at Stripe and leader of Frontier. On its face, Ransohoff explains, the removal and storage of CO2 doesn’t provide customers with the same type of value as other energy products. So Frontier developed an advance market commitment: a risk-adjusted portfolio of carbon removal companies that investors can buy into. This approach provides a marketplace for a product that’s hard to sell but also critical to the transition. “We aren’t going to get to net zero by emissions reduction alone,” Ransohoff says. “There are multiple parts of the solution set that we need to pursue. Carbon removal is just one of them, to make the math work.”

BUT MAKE IT FASHION

An image linking to the web page “The State of Fashion 2024: Finding pockets of growth as uncertainty reigns” on McKinsey.com.

The fashion industry isn’t immune to the geopolitical conflicts and economic volatility that promise to affect every sector in 2024. But in McKinsey’s latest State of Fashion report, senior partners Anita Balchandani , Achim Berg , Gemma D’Auria , and their colleagues note some trends that are fully unique to fashion. Among them is the continued demand for the “gorpcore” aesthetic: picture people in fleece jackets and water-repellent pants running errands rather than taking a hike in the great outdoors. While gorpcore might still carry cachet with urban customers, the more adventure-inclined set is turning the trend on its head . Some customers in this group want streetwear-inspired pieces that can still withstand the elements. So if you’re in the market for trail-friendly jorts or a mountain biking romper with four-way stretch, you’re in luck.

Lead by brushing up on industry trends.

– Edited by Daniella Seiler, executive editor, Washington, DC

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by "McKinsey Leading Off" <publishing@email.mckinsey.com> - 04:46 - 12 Feb 2024

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