After a turbulent 2022 As for investing in technology and talent, the first half of 2023 has seen renewed enthusiasm around the potential of technology to drive progress in business and society. Generative AI deserves a great deal of credit for this renaissance, but it remains just one of many developments on the horizon that can drive sustainable and inclusive growth and solve complex global challenges.
To help executives track the latest developments, the McKinsey Technology Council once again identifies and explains the most important technology trends unfolding today. While many trends are still in the early stages of adoption and scale, executives can use this research to plan for the future by developing an understanding of potential use cases and identifying key skills needed as they recruit or upskill talent to realize these opportunities.
Our analysis uses quantitative measures of interest, innovation and investment to measure the momentum of each trend. Recognizing the nature of these trends and their long-term interconnectedness, we also dive into the underlying technologies, uncertainties, and questions surrounding each trend. This year we added an important new dimension of analysis: talent. We provide data on the dynamics of talent supply and demand for the most relevant roles in each trend. (For more information, please see the sidebar, “Research Methodology.”)
New and tangible
All 14 trends that emerged last year are still on our list, although some have seen accelerating momentum and investment, while others have seen a decline. One new trend, generative AI, has made a strong entry and is already showing the potential to have a transformative business impact.
This newcomer represents the next frontier of artificial intelligence. Based on existing technologies such as applied AI and manufacturing machine learning, generative AI has high potential and applicability in most industries. Interest in the topic (as measured by news and internet searches) has tripled from 2021 to 2022. As we recently wrote, generative AI and other fundamental paradigms are changing the AI game by taking assistive technology to a new level, reducing the time Application development, bringing powerful capabilities to non-technical users. Generative AI is expected to add up to $4.4 trillion in economic value from a range of specific use cases and more widespread uses — such as helping with email drafts — that increase productivity. However, while generative AI can unlock significant value, companies should not underestimate the economic importance and growth potential that core AI and industrial machine learning technologies can bring to various industries.
Investment in most technology trends has tightened year-on-year, but the potential for future growth remains high, as evidenced by the recent rebound in technology valuations. In fact, absolute investments remained strong in 2022, exceeding $1 trillion combined, indicating significant confidence in the potential value of these trends. The constructs of trust and digital identity grew the most among the 14 trends last year, increasing by nearly 50 percent as security, privacy, and resilience become increasingly important across industries. Investment in other trends – such as applied artificial intelligence, advanced connectivity, cloud and edge computing – has declined but this is likely due, at least in part, to their maturity. More mature technologies can be more sensitive to short-term budget dynamics than emerging technologies with longer investment time horizons, such as climate and mobility technologies. Also, as some technologies become more profitable, they can often scale further as marginal investment decreases. Because these technologies have applications in most industries, we have no doubt that their mainstream adoption will continue to grow.
Organizations should not focus too much on the trends that receive the most attention. By focusing only on the hottest trends, they may miss the valuable potential of other technologies and hinder the opportunity to build meaningful capabilities. Instead, companies seeking long-term growth should focus on portfolio-oriented investing across the technology trends that are most important to their business. Technologies such as cloud computing, edge computing, and future bioengineering have shown steady increases in innovation and continue to expand use cases across industries. In fact, more than 400 edge use cases have been identified across various industries, and edge computing is expected to achieve double-digit growth globally over the next five years. In addition, emerging technologies, such as quantum, continue to evolve and show great potential for value creation. Our updated 2023 analysis shows that the four industries most likely to see the early economic impact of quantum computing – automotive, chemicals, financial services and life sciences – could potentially gain up to $1.3 trillion in value by 2035. Through careful assessment of developments and given… Taking a balanced approach, companies can leverage established and emerging technologies to drive innovation and achieve sustainable growth.
Tech talent dynamics
We cannot overstate the importance of talent as a key resource in developing competitive advantage. Lack of talent is one of the most important issues hindering growth. There is a wide gap between the demand for people with the skills needed to get value from technology trends and the talent available: our survey of 3.5 million job openings in these technology trends found that many of the most in-demand skills have less than half that number of qualified practitioners per post on average. worldwide. Companies must be on top of the talent market, prepared to respond to perceived shifts and provide strong value propositions to the technologists they hope to recruit and retain. For example, recent layoffs in the technology sector may represent a silver lining for other industries that have struggled to attract the attention of attractive candidates and retain top tech talent. Additionally, some of these technologies will accelerate the pace of workforce transformation. In the next decade, 20 to 30 percent of the time workers spend on the job could be transformed through automation technologies, leading to significant shifts in the skills required to succeed. Companies must continue to consider how to modify roles or improve the skills of individuals to meet the requirements of their assigned jobs. Job postings in fields related to technology trends grew by a very healthy 15 percent between 2021 and 2022, although global job postings overall fell by 13 percent. Applied AI and next-generation software development together created nearly 1 million jobs between 2018 and 2022. Next generation software development has seen the greatest growth in the number of jobs (as shown).
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Small multiples of 15 slope charts show the number of job postings in different fields related to technology trends from 2021 to 2022. Total growth for all fields combined was about 400,000 jobs, with applied AI having the highest number of job postings in 2022 and seeing a rate of Growth of 6%. Increasing as of 2021. Next-gen software development had the second-highest number of job postings in 2022 and grew at 29% as of 2021. Other categories shown, from most to least in 2022, are as follows: Computing Cloud and Edge Computing, Trust Engineering and Digital Identity, Future of Mobility, Electrification and Renewables, Post-Electrification and Renewables Climate Technology, Advanced Communication, Immersive Reality Technologies, Machine Learning Manufacturing, Web3, Future of Bioengineering, Future of Space Technologies, Generative Artificial Intelligence And quantitative techniques.
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This bright outlook for practitioners in most fields highlights the challenge facing employers struggling to find enough talent to keep up with their demands. The shortage of qualified talent has been a continuing limiting factor in the growth of many high-tech fields, including artificial intelligence, quantum technologies, space technologies, electricity and renewable energy. The talent crunch is particularly evident in trends such as cloud computing and machine learning manufacturing, which are in demand in most industries. It is also a major challenge in fields that employ highly specialized specialists, such as the future of mobility and quantum computing (see interactivity).
