World Bank 60 Percent Approach of Human Resource as Global Wealth versus McKinsey USD 1540 Trillion Benchmark Comparison
The World Bank’s wealth accounting approach focuses on a 60/40 split between human and non‑human capital. In this method, human capital—which is calculated as the present value of future earnings based on education, skills, and health—accounts for about 60% of a country’s wealth in middle‑ and high‑income nations. The remaining 40% is made up of non‑human capital, which includes produced assets like buildings and machinery, as well as natural capital such as forests, agricultural lands, and fossil fuel reserves. This approach aims to capture a country’s long‑term asset base and provides a measure of sustainability by looking at whether investments in human and physical assets are keeping pace with population growth and economic needs.
In contrast, the McKinsey $1,540 trillion benchmark offers a holistic, market‐oriented view of global wealth. Initially set at $1,540 trillion in 2020, this benchmark has been updated post‑pandemic to reflect current market conditions, including the significant volatility in equity, bond, and infrastructure values. Subsequent analyses by institutions like BCG, Brand Finance, and WIPO have focused on specific segments of this wealth—such as financial assets and corporate intangibles—while also highlighting issues like rising debt, wealth inequality, and the integration of ESG factors. McKinsey’s approach provides a snapshot of global assets by aggregating various market values and reflecting real‑time fluctuations, but it tends to break down into specialized segments rather than offering one unified balance sheet.
For policy purposes, the World Bank’s 60/40 wealth accounting framework is generally more useful. It offers a stable, comprehensive picture of national wealth that emphasizes long‑term economic health and sustainability. By focusing on both human potential and physical assets, it gives policymakers clear guidance on where to invest for future growth and how to balance short‑term GDP gains with long‑term asset preservation. While the McKinsey approach is valuable for understanding market trends and investor sentiment, the World Bank method provides the robust, integrated view needed for sustainable policy planning.