The nature of globalization is a topic of intense discussion and debate. Although trade and tariff tensions have dominated recent headlines, important structural changes are underway that garner less attention.

The McKinsey Global Institute (MGI, the economics and business research arm of McKinsey & Company has analyzed global value chains in 23 industries spanning 43 countries. The value chains analyzed account for 96 percent of global trade, 69 percent of global output, and 68 percent of global employment.

One key shift we found is away from trade in goods and toward trade in services and data. Trade in services is growing faster than trade in goods, and already create more value. Another is that all global value chains are becoming more knowledge-intensive. The knowledge economy is now a defining feature of globalization.

Download the full report：Globalization in transition