The Technologies Shaping the Future of Business
McKinsey’s Technology Council has released its annual analysis, identifying the key technology trends that will most significantly affect businesses in 2024. Despite economic challenges in 2023, investment in frontier technologies continues, indicating strong potential for future growth and enterprise adoption. This year’s report highlights the adoption, development, and industry impacts of various advanced technologies. Generative AI (gen AI) remains a standout, and the future of robotics is also a key trend.
Lareina Yee, Michael Chui, Roger Roberts, and Mena Issler offer insights into this evolving landscape. Their analysis considers factors like interest, innovation, investment, and talent across 15 technology trends to provide business leaders with a strategic perspective.
What’s New in this Year’s Analysis
The 2024 report reflects shifts in the technology landscape. Digital trust and cybersecurity, integrating previous discussions of Web3 and trust architectures, have been combined into a single trend. The future of robotics has also gained prominence. To gauge the trends, McKinsey deployed a survey that measured adoption levels.
Generative AI and Electrification Lead the Way
Two trends stood out in 2023: generative AI and electrification and renewables. Gen AI saw an almost 700 percent surge in Google searches between 2022 and 2023, alongside significant increases in job postings and investments. The expansion of large language models (LLMs) and their processing capabilities, along with the increasing modalities gen AI can handle, has fueled considerable innovation. LLMs are being integrated into various software tools, powering chatbots, generating ad campaigns, and accelerating drug discovery. Senior leaders’ awareness of gen AI has increased interest, investment and innovation in AI technologies, such as robotics.
Electrification and renewables was another trend that performed well, with high investment and interest scores. Job postings in this sector also showed modest gains.
Research Methodology
To assess each technology trend, the research team gathered data on five key metrics: search engine queries, news publications, patents, research publications, and investment. These were measured to evaluate each trend’s momentum. The innovation score combines patents and research, while the interest score considers news publications and search queries. Investment measures capital market funding to companies linked with each trend.
Long-Term Outlook Remains Positive
While some trends experienced downturns in investment and hiring during 2023, the long-term outlook appears positive. This optimism is supported by continued expansion in tech-related job postings (up 8 percent from 2021 to 2023) and sustained innovation. Technological equity investments decreased by 30 to 40 percent in 2023, but the pace of innovation has not slowed.
Enterprise Technology Adoption
The process of technology adoption typically follows an S-curve pattern, progressing from initial innovation and exploration to piloting, scaling, and fully scaled adoption across the enterprise, based on the McKinsey survey.
The adoption curve indicates the stages of technological adoption, from frontier innovation to fully scaled across the enterprise.
This chart displays the adoption levels of different technologies, revealing that mature technologies are often enablers for more recent developments.
As companies integrate new technologies, they must consider factors such as user trust, economic models, regulatory environments, and talent availability.
Recommendations for Executives
For senior leaders navigating the technology landscape, a long-term perspective is crucial. By investing in talent, testing and learning, and reimagining their businesses, they can create opportunities for success. Leaders should monitor ecosystem conditions to make informed investment decisions. Adoption levels vary across industries and company sizes. The successful integration of new technologies requires adapting to these conditions and effectively integrating new technologies into business models.
