Here is a brief excerpt from one of the interviews within McKinsey & Company’s Leadership Matters Series. In this instance, McKinsey’s Vijay D’Silva and Roberta Fusaro interview Adena Friedman. To read the complete interview, check out others resources, learn more about the firm, and sign up for email alerts, please click here.

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Adena Friedman: When Nasdaq started back in 1971, we were the disrupter of our time. We were using the most modern technology to democratize the capital markets, which, back then, were “physical”—based on having a lot of people in a specific room. By contrast, we launched a networked exchange that was available to anyone anywhere in the US. In 1971, our first listings were Applied Materials, Comcast, Intel—companies that are now, of course, staples in the US economy, but back then, they were still just ushering the country into the technology age. In the 1980s, Microsoft and Apple listed on Nasdaq. And in the 1990s, we coined the phrase, “Nasdaq, the stock market for the next 100 years.” That’s when I joined the company, in 1993, and we started to think about how we could help drive the future of the economy. The market model was still shifting, and it wasn’t until online retail brokers were born, in the later 1990s, that capital markets really became democratized. Millions of investors were starting to be able to access the markets directly. Today, it’s tens of millions, if not hundreds of millions, of retail investors coming in and trading every day. We were struggling to get to 500 million shares a day back then; now we’re at ten billion to 15 billion shares a day

About 15 years ago, we started advancing ourselves beyond the equities markets. We are now among the largest options markets in the US, and we own many of the Nordic markets in Europe. We also sell our technology to other exchanges, market operators, and broker–dealers around the world. We have a data and analytics business that’s been scaled for the investment community. It’s been an interesting journey. Obviously, there’s been a big shift in the breadth and depth, electronification, and globalization of the markets.

The Quarterly: To your point about globalization, can you talk about the trends in capital raising across borders?

Friedman: Companies worldwide are looking to tap public markets and public investors here in the US. Why do they choose to come to the US when they have vibrant markets in their own countries? One obvious reason is the breadth and depth of the investor base in the United States; it’s the most diversified of any market in the world. US capital markets bring together retail investors, institutional investors, pension funds, and hedge funds. That whole mix creates more liquid markets, tighter spreads, and better execution for investors. If you’re, say, a biotech company, knowing that you’re coming in and tapping an investor base that really understands your sector will give you every opportunity to maximize your value.

The Quarterly: You’ve talked about the concept of “markets everywhere”—the fact that markets can play a role in all sectors of the economy. What are the benefits of that approach?

Friedman: Nasdaq is a platform by which participants can come in and establish prices for goods and services on an ongoing and, in many cases, real-time basis. We spend a lot of time thinking about how to apply the core elements of the market economy—that is, this two-sided price formation that gives both buyers and sellers a voice—outside of securities markets, stocks and bonds, and futures and commodities. Recently, we’ve been working with companies that want to bring market principles to other parts of the economy. Specifically, we provide technologies and partner with about 130 other organizations across the world, supporting traditional exchanges but also new and exciting ones. The airline industry, for instance, has a vision for how it wants to manage potential futures around the price of a seat. Skytra, a start-up index launched by Airbus, gives people price formation around where tickets are being bought and sold. Over time, Skytra wants to create a marketplace that lets people buy into the futures on ticket prices. This approach can be applied to other hard goods—for instance, to elements of the healthcare industry, particularly around healthcare data. How do you price the data that could be used for medical research? Another area would be real estate, in the form of fractionalized real-estate assets and, of course, digital assets as well.

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Here is a direct link to the complete interview.

If you wish to check out the Leadership Matters series, please click here.