Confidential and proprietary. Any use ofthis material without specific permission of Copyright © 2026 McKinsey & Company.All rights reserved. Cover image: Photo-Illustration by Neil Jamieson.Source images by Getty (38).All interior images © Getty Images. McKinsey Global Institute The McKinsey Global Institute was established in 1990. Our mission is to provide a fact base toaid decision making on the economic and business issues most critical to the world’s companiesand policy leaders. We benefit from the full range of McKinsey’s regional, sectoral, and functional Our research is currently grouped into five major themes: —Resources of the world: Building, powering, and feeding the world sustainably —Human potential: Maximizing and achieving the potential of human talent —Global connections: Exploring how flows of goods, services, people, capital, and ideas —Technologies and markets of the future: Discussing the next big arenas of value and competition We aim for independent and fact-based research. None of our work is commissioned or funded byany business, government, or other institution; we share our results publicly free of charge; and weare entirely funded by the partners of McKinsey. While we engage multiple distinguished externaladvisers to contribute to our work, the analyses presented in our publications are MGI’s alone, and You can find out more about MGI and our research atwww.mckinsey.com/mgi. MGI directors MGI partners Shubham Singhal (chair)Chris BradleyTanguy CatlinKweilin Ellingrud Arvind GovindarajanMekala KrishnanAnu MadgavkarJan Mischke Contents At a glance3Introduction5 CHAPTER 1At 250, the United States is the world’s mostcompetitive economy6 Looking back: Four chapters21 CHAPTER 3 CHAPTER 4Looking ahead: Securing the next era46 CHAPTER 5America’s national project65 Acknowledgments67Endnotes68 At aglance —At 250 years old, the United States is the world’s most competitive economy.It generates26 percent of global GDP and is home to 59 of the world’s top 100 firms. In the past severalyears, accelerating US productivity growth and announced foreign direct investment inflows —It’s a new world.AI is unveiling an ever-expanding realm of possibilities, just as geopoliticalcontention is growing and fertility rates are falling. The United States is a global technologyleader today and spends 27 percent of the world’s research and development dollars—but will —Some US historical competitive advantages are becoming liabilities.Current generations oweit to future ones to address deteriorating fiscal health, eroding infrastructure, declining educational —Safeguarding an economic edge requires evolving, as America has before.The UnitedStates has repeatedly adapted its economic model to meet, and then shape, new technologiesand geopolitical realities. Since the country’s founding, American competitiveness has shifted —A culture of innovation and natural abundance are abiding strengths on which to draw.Byour count, Americans created or supported 76 of the 100 most important inventions since 1776,from steamboats to smartphones, from the electrical grid to generative AI. Over its history, thecountry has profited from twice as much agricultural land per capita as any other large economy, —We the people will write the coming chapter.Collective effort from American individuals,business, and government can ensure energy abundance, an infrastructure backbone, educationthat builds minds and skills to match new technology, and the financial strength to pay for it all. The McKinsey & Company It began with a startling act of rebellion. In July 1776, delegates from 13 British colonies declaredtheir independence, dissolved their bonds with England, threatened war, and pledged “our Lives, our One delegate described the mood in the room as a “pensive, awful silence.” The new nation’s leadersharbored grave reservations. All were acutely aware of the potential consequences of their choice:ruin, prison, war, and death. At a remove of 250 years, it’s hard to conceive of the courage that the Their courage paid off. Over two and a half centuries, the country has transformed from a collectionof agrarian colonies into the world’s largest and most influential economy. American firms shapeglobal markets, accounting for more than half of the world’s market capitalization. US innovationecosystems define the frontier of science and technology; 76 of the 100 most influential innovations America’s enduring economic edge was never inevitable. The United States, like most every nation,has been shaped by extraordinary difficulties—wars, recessions, depressions, and pandemics. ButAmerica has consistently come through in ways that others have not. In large measure, that’s thanksto two foundations of American economic competitiveness that it has relied on again and again: a Through every chapter of the past 250 years, the United States has harnessed these foundations,not in a fixed economic model but thro