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McKinsey Technology Trends Outlook 2024
By Lareina Yee et al., | McKinsey & Company | July 16, 2024
Extractive Summary of the Article | Read | Listen
Despite challenging overall market conditions in 2023, continuing investments in frontier technologies promise substantial future growth in enterprise adoption. While the macroeconomic environment with elevated interest rates has affected equity capital investment and hiring, underlying indicators—including optimism, innovation, and longer-term talent needs—reflect a positive long-term trajectory in the 15 technology trends the authors analyzed. Their understanding can help executives plan ahead by developing an understanding of potential use cases, sources of value, adoption drivers, and the critical skills needed to bring these opportunities to fruition.
For easier consideration of related trends, the authors grouped them into five broader categories: the AI revolution includes Applied AI, Industrializing machine learning, building the digital future that covers Digital trust and cybersecurity; compute and connectivity frontiers that features Advanced connectivity,Immersive-reality technologies, Cloud and edge computing, and Quantum technologies; cutting-edge engineering which deals with Future of robotics, Future of bioengineering, and Future of space technologies; and finally a sustainable world which scoped with eElectrification and renewables and Climate technologies beyond electrification and renewables. Of course, there’s significant power and potential in looking across these groupings when considering trend combinations.
Although many trends faced declines in investment and hiring in 2023, the long-term outlook remains positive. This optimism is supported by the continued longer-term growth in job postings for the analyzed trends (up 8 percent from 2021 to 2023) and enterprises’ continued innovation and heightened interest in harnessing these technologies, particularly for future growth.
Despite an overall downturn in private equity investment, the pace of innovation has not slowed. The trajectory of enterprise technology adoption is often described as an S-curve that traces the following pattern: technical innovation and exploration, experimenting with the technology, initial pilots in the business, scaling the impact throughout the business, and eventual fully scaled adoption. Factors that could affect the adoption of these technologies include high costs, specialized applications, and balancing the breadth of technology investments against focusing on a select few that may offer substantial first-mover advantages. The process of scaling technology adoption also requires a conducive external ecosystem where user trust and readiness, business model economics, regulatory environments, and talent availability play crucial roles. Since these ecosystem factors vary by geography and industry, we see different adoption scenarios playing out.
As executives navigate these complexities, they should align their long-term technology adoption strategies with both their internal capacities and the external ecosystem conditions to ensure the successful integration of new technologies into their business models. Executives should monitor ecosystem conditions that can affect their prioritized use cases to make decisions about the appropriate investment levels while navigating uncertainties and budgetary constraints on the way to full adoption . Across the board, leaders who take a long-term view—building up their talent, testing and learning where impact can be found, and reimagining the businesses for the future—can potentially break out ahead of the pack.
3 key takeaways from the article
- Despite challenging overall market conditions in 2023, continuing investments in frontier technologies promise substantial future growth in enterprise adoption.
- While the macroeconomic environment with elevated interest rates has affected equity capital investment and hiring, underlying indicators—including optimism, innovation, and longer-term talent needs—reflect a positive long-term trajectory in the 15 technology trends analyzed. Their understanding can help executives plan ahead by developing an understanding of potential use cases, sources of value, adoption drivers, and the critical skills needed to bring these opportunities to fruition.
- These trends are: the AI revolution that includes Applied AI, Industrializing machine learning, building the digital future that covers Digital trust and cybersecurity; compute and connectivity frontiers that features Advanced connectivity, Immersive-reality technologies, Cloud and edge computing, and Quantum technologies; cutting-edge engineering which deals with Future of robotics, Future of bioengineering, and Future of space technologies; and finally a sustainable world which scoped with electrification and renewables and Climate technologies beyond electrification and renewables. Of course, there’s significant power and potential in looking across these groupings when considering trend combinations.
(Copyright lies with the publisher)
Topics: Technology, Trends, AI, Robotics, Environment, Cloud Computing, AI Applied
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