process of “creative destruction” in the economy in which the most productive companies take market share from less productive ones. In Brazil, MGI has estimated that informality 46 explains about one-third of Brazil’s productivity gap with the United States. In Mexico, MGI has found that the productivity of informal firms is declining, significantly dampening the 47 country’s overall GDP growth. ••• The economic prospects of emerging economies would be far brighter if more individuals, businesses, and even governments had access to modern financial services. For now, billions of women and men and hundreds of millions of businesses, small and large, are trapped in a cash economy. But a rescuer is at hand: digital technology, in the shape of a mobile phone. If digital’s power is harnessed in finance as it increasingly is in other types of economic activity, this could prove transformative for emerging economies. The technology exists and is now widespread. The opportunity is waiting to be seized. In Chapter 2, we describe how digital services can transform finance, and what that would mean for people and businesses across the developing world. 46 How Brazil can grow, McKinsey Global Institute, December 2006. 47 A tale of two Mexicos: Growth and prosperity in a two-speed economy, McKinsey Global Institute, March 2014. McKinsey Global Institute Digital finance for all: Powering inclusive growth in emerging economies 29