We recently compiled a list of the Top 20 industries in the world in 2024 and in this article, we’ll shed light on the top one.
Navigating the Global Economic Landscape: Challenges and Opportunities in 2024
The global economy has experienced significant fluctuations in recent years, particularly due to the impact of the COVID-19 pandemic and subsequent recovery efforts. In the decade leading up to the pandemic, the global economy experienced steady growth, averaging around 3.8% annually.
The world saw its worst economic fall since the Great Depression as a result of the outbreak. The global GDP shrank by 3.0% in 2020, which was a sharp contrast to the 2.8% increase in 2019. The decline of international trade was one of the main causes of this economic crisis. The epidemic led to a sharp reduction in global trade, which made the general downturn in economic performance worse. Due to the interconnectedness of the global economy, disturbances in one area of the world could have a cascading effect on other regions and sectors, creating a series of economic issues.
In 2024, the OECD projects a severe slowdown in global economic growth, with rates of decline below historical averages. The growth rate is predicted to decrease to 2.7% in 2024 from 2.9% in 2023. The IMF also predicts a slowdown, with 3.0% in 2023 and 2.9% in 2024—both significantly below the historical average of 3.8%.
A more upbeat forecast for the world economy in 2024 is provided by Goldman Sachs Research, which projects 2.6% GDP growth. They anticipate steady income growth, declining inflation, a strong labor market, and a revival of manufacturing. Interest rate reductions by central banks are expected to act as a buffer against recession. Most major economies, including the US, are predicted to do well as they transition from managing inflation to reducing the danger of recession.
In 2024, there will be possibilities and challenges in the global industrial market for several different industries. The US industrial sector is expected to gain a great deal of legislative help. The Inflation Reduction Act (IRA) has caused investment in the manufacturing of semiconductors and clean technologies to nearly triple since 2021. More than 75,000 new employees, $88 billion in investments, and approximately 200 new clean technology manufacturing sites have resulted from this. The industrial sector’s yearly construction spending as of July 2023 was $201 billion, up 70% from the previous year and suggesting promising growth in 2024.
International trade markets also continue to be robust. A $500 billion growth in trade in services illustrates adaptability despite a predicted 5% downturn. Geopolitical reasons are driving the integration of developing economies, such as Mexico and East Asian countries, into global supply chains.
With 18 of the 20 fastest-growing trade routes, Asia continues to dominate the global economy, accounting for over 50% of trade value. This trend is particularly evident in trade between China and the UAE, where non-oil commerce is expected to reach $72 billion in 2022, representing an 18% growth, and overall bilateral trade reaching $99.3 billion.
Biggest Companies Revolutionizing the Global Economy
Biggest companies like Microsoft Corporation (NASDAQ:MSFT), Exxon Mobil Corporation (NYSE:XOM), Chevron, JP Morgan, Visa, and Johnson & Johnson, among many others, have been making trends in the global economy. For Example, Microsoft Corporation (NASDAQ:MSFT) is a multinational technology company that plays a significant role in the global economy through its diverse range of products and services, substantial economic contributions, and innovative advancements. Microsoft’s partner ecosystem and cloud services are major drivers of economic growth. Microsoft forecasts that artificial intelligence (AI) could contribute up to $15.7 trillion to the global economy by 2030. This projection underscores the transformative potential of AI in various sectors, including healthcare, education, and agriculture. In Africa alone, AI could generate $1.2 trillion, representing a 5.6% increase in the continent’s GDP by 2030. Microsoft Corporation (NASDAQ:MSFT) has pledged to equip 10 million people from underserved communities with digital skills for jobs in the digital economy by 2025. Additionally, Microsoft aims to skill and recruit 250,000 people into the US cybersecurity workforce by 2025, addressing significant workforce shortages in this critical area. In Q1 2024, Microsoft Corporation (NASDAQ:MSFT) generated $56.5 billion in revenue, an increase of 13% year-over-year, and the reported operating income for the same period stood at $26.9 billion, an increase of 25%.
Similarly, Exxon Mobil Corporation (NYSE:XOM) is one of the oldest and most prominent players in the global oil and gas industry, with a significant impact on the global economy. In 2022, ExxonMobil, its divisions and affiliates, employees, retirees, and the ExxonMobil Foundation collectively provided $158 million in contributions and community investments worldwide. Of this total, $41 million supported U.S. communities, and $91 million supported communities in other countries. Additionally, Exxon Mobil Corporation (NYSE:XOM) employees and retirees donated $26 million through the company’s matching gift and employee-giving programs. ExxonMobil has also invested approximately $500 million annually in women-owned businesses, supporting economic change for women through various initiatives. Exxon Mobil Corporation (NYSE:XOM) reported strong first-quarter earnings of $8.2 billion and generated $14.7 billion in cash flow from operating activities.
A businessperson using a tablet to track the performance of a non-diversified fund investment in the technology industry.
Our Methodology
For our methodology, we have ranked the top industries in the world in 2024 based on their current market caps.
1. Semiconductors
Market Cap: 6518.17 billion
The semiconductor industry tops our compiled list of the top 20 industries in the world in 2024. The global semiconductor industry generated $264 billion in sales in 2023. This represents a significant portion of global economic activity, with semiconductor sales accounting for over 0.50% of global GDP in recent years. Semiconductors are also a major export for several countries. In 2023, the United States alone exported $52.7 billion worth of semiconductors.
The global semiconductor market is projected to reach $1 trillion by 2030, up from $600 billion in 2021. The recent semiconductor shortage demonstrated the industry’s outsized impact on the broader economy. The U.S. Department of Commerce estimated that the chip shortage shaved $240 billion off U.S. GDP in 2021, equivalent to a 1% reduction. In 2022, the average car contained over $500 worth of semiconductors, totaling over $60 billion for the automotive industry that year.
To learn about other top industries in the world in 2024, you can check out our detailed report Top 20 Industries in the World in 2024.
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