McKinsey's Eric Labaye: Generative AI May Widen the Technology Gap

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“The biggest bottleneck in AI development is organizational culture.”

On September 11, Joe Ngai, Chairman of McKinsey Greater China, said this at the 2025 Bund Summit.

In his speech, “From ‘World Factory’ to ‘Global Corporate Citizen’,” Joe Ngai presented three key observations—embracing the AI dividend requires organizational transformation, the reconstruction of global trade corridors is accelerating, and Chinese enterprises going overseas have entered a brand-new 3.0 stage.

Over the past 30 years, McKinsey’s key experience in strategic consulting in China is that choosing the “battlefield” is the most important strategy for enterprises. According to McKinsey’s business performance analysis tool from 2015-2019, the three industries with the highest average economic profit are biotech, technology hardware, and automotive—all sectors where AI technology creates significant value.

However, over the past decade, only one out of every twelve companies was able to leap from the middle tier to a leading position, and among the top quintile performers, only about half could maintain their lead. Joe Ngai pointed out bluntly, “If the sector isn’t the most profitable, even the leading companies will find their efforts in vain.”

In recent years, both investment and innovation in AI have surged. According to Crunchbase News, in Q2 2025, AI companies received approximately $90 billion in venture capital. A McKinsey survey shows that 92% of executives plan to increase AI investment in the next three years. Additionally, Yahoo Finance reports that in 2025, Meta, Amazon, Alphabet, and Microsoft plan to invest $325 billion in AI infrastructure, up 46% from 2024.

Clearly, AI is empowering all key tech trends, from agents performing complex tasks, to driving innovation in specialized semiconductors, to accelerating bioengineering R&D and enhancing robot adaptability. Its catalytic effect covers energy, manufacturing, research, and many other fields.

Notably, the bottleneck in AI development is not technology or applications, but rather organization and culture. Joe Ngai points out that successful AI transformation must be CEO-led and driven by business—not IT; it should focus on profitability, not application scenarios; it requires restructuring processes and organizations, not just optimization; it must break down organizational barriers and inertia. The real breakthrough lies in “change management.”

Additionally, Joe Ngai notes that Chinese companies must learn to compete in new “trade corridors,” including emerging markets in Southeast Asia, the Middle East, Latin America, Eastern Europe, and Africa. Furthermore, the “local for local” model is becoming a global phenomenon, and companies should work towards a more decentralized and diversified global footprint.

Going global has been one of the hottest keywords for Chinese companies in the past two years. In reality, after decades of rapid growth, Chinese enterprises are still mainly focused on the domestic market. According to analysis by the McKinsey Global Institute, the share of overseas revenue for Chinese companies was 7% in 2010 and 8% in 2021, far below Korea’s 60% and 65%, and also lower than that of Japan and the US. Moreover, among the world’s top 100 brands in 2024, only 12 are from China, starkly contrasting with 61 from the US.

Joe Ngai categorizes the globalization process of Chinese enterprises into three stages: the 1.0 era relied on low-cost manufacturing and export scale; the 2.0 era focused on overseas M&A to enhance capabilities; and the 3.0 era emphasizes sustainable development as global corporate citizens.

This means Chinese companies need to move from pure export transactions to building a global mindset, from exporting end products to exporting IP, expertise, and capabilities, adopt diverse cooperation models such as joint ventures and minority equity investments, and build international management teams. He said, “If we can get to this stage, Chinese companies will have more options and more room for growth.”

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