Cautiously optimistic on global economy, says Rich Lesser, Global Chair, BCG
Boston Consulting Group (BCG) global chair Rich Lesser is optimistic about the Indian and US economies. India has been extraordinary in terms of growth and the US is poised for a strong 2025 economically irrespective of the outcome of the presidential election, he tells Shilpa Samant. On the global economy, Lesser says, BCG is cautiously optimistic about the years ahead. Edited excerpts:
With regard to the changes that are happening geopolitically, is there room for more growth and opportunities?
I joined BCG in 1988, that’s 36 years ago. We’ve averaged about 14% growth for 36 years. That’s come in times when it’s been very challenging and times when it’s been exciting. We have built and supported our clients in more challenging environments and more optimistic growth-oriented environments. We look at the future with genuine optimism. But that still means companies need to focus on productivity and building new capabilities. AI can help transformation to drive businesses and improve performance. Of course, specifics will vary by sector and geography.
The upcoming election in the US is going to play a pivotal role in how policies shape up. What is your take on how things are going to be a few months down the line?
From a purely economic point of view, the US is poised for a strong 2025 either way. They are very different candidates with different policies, and certainly as it relates to international relations and in terms of prioritisation, they’ll be quite different. But interest rates are set to start falling, and the US will likely have good growth this year. I do think stability, predictability, climate, foreign relations, all of those elements are very important. I don’t think that politics is the main risk factor in the US economy. In fact, we have seen many different things-like a pandemic. People thought that was going to tank the economy, but it was temporary. Even as the Russia-Ukraine war started, there was a thought that it was going to have a major macroeconomic impact, but it turned out to be small. Some thought that in having to raise interest rates to bring inflation under control, there was no way to have a soft landing and that a recession was inevitable. That turned out not to be true. The US is a very resilient economy and even the global economy is more resilient than many expect, and so we are cautiously optimistic about the years ahead.
How do you see India as an investment destination?
For BCG, India has been extraordinary in terms of growth. We have averaged 20%-plus growth for the last five years. So, BCG has grown in double digits overall, but India’s been even higher. It has also been a hub of building capabilities in our practices and also in how we operate the firm. We have a fantastic team here. It’s been a source of tremendous leadership for the firm globally as well. We are really optimistic on India. The opportunity is enormous, and BCG has every intent to be a big part of it.
Is AI an area where India could take a lead or be one of the leaders?
Absolutely. Take tech and software capabilities; they are enormous here and globally Indians are at the centre of it. I am extremely confident India will be a technology hub for the world, and AI will be increasingly embedded in nearly all technology.
With BCG reporting global revenue of $12.3 billion in 2023 and an estimated growth rate of 5% so far, how has 2024 turned out to be for you?
The three-year growth of 2020-2023 was 12%, which was almost the same as the 10-year growth of 13%. For the last 12 months, we’ve been back to double-digit growth and with exciting aspects of demand, particularly as artificial intelligence reshapes the economy. While there’s a renewed focus on growth and innovation, there’s still a lot of focus on transformation and addressing a more challenging economy in some parts of the world. But I think we’re feeling quite optimistic looking ahead.
You’ve surpassed your traditional rivals when it comes to revenue growth. What exactly is giving you that edge?
Our focus is about how to drive meaningful impact, lasting change and real value creation for our clients. That is an obsessive focus in BCG, along with attracting top talent and building new capabilities including in technology. This enables us to focus not just on getting the strategy right, but also driving the critical aspects of change that are required to make things really happen. As a result, we’ve outgrown our industry, probably at a 30% to 40% faster over the century.
What should be the idea for all industries as well as BCG when it comes to investing in technology like generative AI?
For our clients, we typically focus on three big things. The first is focus. This is a new capability to learn, and there’s this tendency to start a lot of different initiatives at once. But it is very important to be focused on the places where it can meaningfully change business outcomes, whether it’s improving productivity, gaining share, or creating new business models. And the third point is that translating these tools and technologies into impact at scale in big companies is partly about the technology, but it’s even more about the people and process such as leadership, culture, reskilling and new ways of working.
Source: GWFM Research & Study