The world is going through a time Increase momentum and investment in emerging technologies. In this episode of Asia's Future Podcast, McKinsey Senior Partners Vinayak HV and Lareena Yi discuss the implications of global technology trends, particularly in Asia. Being confident, ambitious and creative, helping people learn, and recognizing when it's time to expand are some of the main points of their conversation.
Below is an edited transcript of their conversation.
Debbie Cheung: Hello everyone, and welcome to Mackenzie Asia's Future Podcast. I'm Debbie Cheung and I'm your host for this episode. Today, we'll look at global technology trends and discuss which ones are most important for Asian businesses in 2023. Joining me in this episode are two very special guests, Vinayak HV and Larina Yee. Vinayak is a senior partner in McKinsey's Singapore office and head of McKinsey's digital business in the Asia-Pacific region. Larina is a senior partner in the Bay Area office, a co-leader of the Technology, Media and Communications practice, and chair of McKinsey's Technology Council.
It's great to have you both with us today. Before we delve deeper, can you give us a brief overview of some of the key technology trends that you have observed this year, not only in the region, but globally as well?
Larina Yee: We looked at over 100 different types of technologies and tried to combine them into 15 major technology trends that will be with us for the next decade or more. It's a really diverse list of techniques. There has been increasing momentum in terms of investment and interest in deploying some of these emerging technologies over the past couple of years. This includes everything from the technologies building our digital future to “low code, no code” thinking; From next generation software development to how we think about trust architecture. It also includes the computing and connectivity businesses we're trying to advance — from edge computing to quantum computing and immersive reality technologies, like augmented reality (AR) and virtual reality (VR), to what drives a sustainable world.
One of the things we've spent a lot of time looking at is space technology – how it can be applied in space, but also its implications for what we do here on Earth. But you're probably all waiting for me to say “generative AI.” Undoubtedly, this was this year's winner in terms of most interesting new technology. However, we have been looking at the AI revolution for several years, which has been fascinating – applied AI, analytical AI, all the work in machine learning processes, for example.
Debbie Cheung: Vinayak, where does Asia fit into these technology trends? How is the region helping to develop trends like generative AI, for example?
Vinayak HV: I am incredibly optimistic and hopeful about Asia's potential and the role the region can play in terms of promoting technological progress. I'm optimistic for a few different reasons. First, Asia is a place where there is a huge demographic dividend. If you look at a country like India, more than 75% of the STEM graduates in the region have come from there over the past few years.
The second reason is the pace of innovation in Asia. The region has accounted for about 86 percent of the patents filed over the past few years. China alone accounts for about 26 percent of unicorns.
The final reason is that Asia has shown, with every technological wave, the ability to make great leaps. Technology can make such a difference in the lives of consumers in Asia. Consumers are very open to adopting new technology, especially in fast-growing, high-GDP per capita economies such as India and Indonesia. We've seen this with the mobile revolution, and in the past, with technologies like WhatsApp and BlackBerry Messenger. I think there is a tremendous desire in the region to develop the full potential of technology.
I am optimistic about the potential difference these technological trends can make to the economies and people of Asia, to the lives of individual consumers, as well as in enabling new world-class enterprises.
Larina Yee: One of the most surprising things about these technologies is that they push the boundaries of economic growth. If we combine generative AI with the basket of automation technologies, we are looking at a global GDP growth potential of $4.4 trillion. This is larger than the size of the United Kingdom.
Generative AI and many of these other technologies are also catalysts in terms of what we do and how we work. For example, in 2017 we looked at how automation technologies impact GDP. When we re-ran that analysis this year and looked at the difference that generative AI makes, we found that the ability to capture some of that GDP has advanced by a decade with generative AI.
Debbie Cheung: What are practical ways in which companies can deal with this new digital era? Why should business leaders care about these technology trends? What advice would you give to CEOs looking to enter this new digital era?
Larina Yee: I think it's all about scale and bold aspirations. We can all play with technology because it's fun and exciting; You can definitely rotate the pilot very quickly. But the question leaders need to ask is: “How do we think about technology in relation to our growth strategy, and how can technology serve as a rocket ship to help us accelerate our business goals?” When business goals are combined with the power of some of these emerging technologies, this is where you get tremendous results. Companies need to be persistent and committed to achieve deployments at scale. This doesn't mean there are 100 users in it; It's more like 100,000. That's when you start moving through productivity numbers.
I think the second thing that's really important for leadership to take into account is the progress that's been made in AI alone over the last five or six years. This has changed job opportunities. One of the things we looked at in this year's report is total global job postings. We noticed that there was a 13% decrease in job postings, but a 15% increase in technology-related jobs, all related to these 15 trends we talked about.
To link the decline in some jobs and the growth in technology jobs, leadership and companies have a responsibility to help people be able to manage and use these technologies. For example, today you can apply to become an Instant Engineer or Machine Learning Specialist, jobs that were not available when you went to college. In order to be able to apply for these, I will need help.
Vinayak HV: I have a few things to add to that. First, I believe it is important for every CEO and business leader to fully understand that the pace of technological change will continue to accelerate. Just recognizing that, no matter what industry you're in, goes a long way.
Another thing that I think is important for CEOs and business managers to keep in mind is the idea of sensing. We tried to quantify the 15 technology trends in terms of the size of their impact, as well as the pace of innovation. I think it's important to be aware of how technologies are changing — for example, quantum — but also to have a mechanism within your organization to sense different technologies and know when it's the right time to scale.
Another thing is the idea of learning. I am a firm believer that everyone can learn. There are 80-year-olds in India currently ordering groceries using e-commerce. I believe business leaders must create an environment where everyone can learn and thrive. I also believe that the nature of jobs will change. When I think about what my children will learn when they grow up, I can't say what kind of jobs they will end up with. But I know that as long as they keep learning, they will be fine. The same applies to all of us.
There are three important characteristics I always tell CEOs and business leaders who are wondering how to navigate technology trends. First: the necessity of optimism. I think it's very easy to feel pessimistic about the impact of technology.
Secondly, the concept of trust. This technology is available to everyone, it is a matter of persistence, ambition and the ability to embrace change. And third, we have to be responsible, especially with respect to generative AI. I think there are many unresolved questions that we as a society have to deal with. Having responsible adults to make decisions will be important. Bottom line: Be optimistic, confident and responsible.
Debbie Cheung: What is the main idea you would like to tell our listeners? Larina, do you want to go first?
Larina Yee: I like to emphasize the power of creativity and technology. We looked at each of these technologies such as applied artificial intelligence, advanced connectivity, and next-generation software. Its real power is the creative way people come together – building new frontiers – to create new ways in which we work and live. Just think about how many of these technologies are integrated into an electric car, or the ability to mitigate human errors in surgery, or when using robots. These are amazing things that help us in our work and daily life.
Vinayak HV: I believe technology is a tool and an enabler. The point I want to emphasize to everyone listening to this podcast is that every individual, every organization, every economy, and every society has the ability to win and succeed. What it comes down to is the stance each organization takes towards any emerging technology and how it enables scaling and learning across the entire organization.
Debbie Cheung: Thank you for joining us Asia's Future Podcast I hope to see you all again in the next episode.
