After a tumultuous 2022 Regarding technology investment and talent, the first half of 2023 will see renewed enthusiasm about technology’s potential to drive progress in business and society. Generative AI deserves much of the credit for ushering in this resurgence, but there are also other issues at hand that have the potential to drive sustainable and inclusive growth and solve complex global challenges. Just one of many advances.
To help executives keep track of the latest developments, the McKinsey Technology Council has once again identified and interpreted the most important technology trends unfolding today. While many trends are in the early stages of adoption and expansion, business leaders can use this research to understand potential use cases and pinpoint the critical skills needed when hiring and upskilling talent. Identifying and realizing these opportunities will help you plan ahead.
Our analysis looks at quantitative measures of interest, innovation, and investment to measure the momentum of each trend. Recognizing the long-term nature and interdependence of these trends, we also explore the underlying technology, uncertainties, and questions surrounding each trend. This year, we added an important new dimension to our analysis: talent. We provide data on the dynamics of talent supply and demand for the roles most relevant to each trend. (For more information, see Research Methodology in the sidebar.)
new and noteworthy
All 14 trends from last year remain on the list, with some gaining momentum and investment while others have seen a downward trend. One of the emerging trends, generative AI, is emerging in a big way and is already showing potential to transform business.
This new entrant represents the next frontier in AI. Generative AI, built on existing technologies such as applied AI and machine learning industrialization, has high potential and applicability in most industries. Interest in this topic (as judged by news and internet searches) tripled from 2021 to 2022. As we wrote recently, generative AI and other foundational models are taking assistive technologies to a new level, reducing application development time, and changing the game for AI. Provides powerful functionality even for non-technical users. Generative AI is poised to generate up to $4.4 trillion in economic value through a combination of specific use cases and broader applications, such as helping draft emails to improve productivity. Still, while generative AI can create significant value, companies should not underestimate the economic importance and growth potential that the industrialization of underlying AI technologies and machine learning will bring to a variety of industries.
Although investments in most technology trends have tightened year-over-year, the potential for future growth remains strong, as further demonstrated by the recent recovery in technology valuations. In fact, absolute investment numbers remain strong for him in 2022, with him totaling over $1 trillion, demonstrating great confidence in the potential value of these trends. Of the 14 trends last year, Trust Architecture and Digital Identity grew the most, increasing by nearly 50% amid the growing importance of security, privacy and resiliency across industries. Investment in other trends, such as applied AI, advanced connectivity, and cloud and edge computing, has declined, at least in part due to their maturity. More mature technologies may be more sensitive to short-term budget trends than earlier technologies with longer investment horizons, such as climate and mobility technologies. Also, as some technologies become more profitable, they can often be expanded further with less marginal investment. Given that these technologies have applications in most industries, there is little doubt that mainstream adoption will continue to grow.
Organizations should not focus too much on the hottest trends. Focusing only on the most hyped trends can miss out on the huge value potential of other technologies and hinder opportunities for purposeful capacity building. Instead, companies aiming for long-term growth should focus on portfolio-oriented investments across the technology trends that matter most to their business. The future of bioengineering with technologies such as cloud and edge computing shows a steady increase in innovation, and use cases continue to expand across industries. In fact, over 400 edge use cases have been identified across various industries, and edge computing is predicted to experience double-digit growth globally over the next five years. Additionally, nascent technologies such as quantum continue to evolve and show great potential for value creation. Latest analysis to 2023 finds that the four industries with the fastest economic impact from quantum computing – automotive, chemicals, financial services and life sciences – could be worth up to $1.3 trillion by 2035 It has been shown that it is possible. Considering a balanced approach, companies can leverage both established and emerging technologies to drive innovation and achieve sustainable growth.
Tech talent dynamics
The importance of human resources as a key source of competitive advantage cannot be overstated. Lack of human resources is the biggest problem that hinders growth. There is a huge gap between the demand for talent with the skills needed to extract value from technology trends and the talent available. Our research of 3.5 million job postings in these technology trends found that many of the most in-demand skills were less than half that number. Number of qualified practitioners per posting as a global average. Companies need to stay ahead of the talent market, respond to significant changes, and be ready to offer a strong value proposition to the engineers they want to recruit and retain. For example, recent layoffs in the technology industry may be a ray of hope for other industries struggling to attract the attention of attractive candidates and retain senior technology talent. Additionally, some of these technologies will accelerate the pace of workforce transformation. Over the next decade, 20 to 30 percent of the time a worker spends on the job will be transformed by automation technology, potentially significantly changing the skills needed to succeed. And companies must continue to consider how to adjust roles and improve the skills of individuals to meet customized job requirements. Job openings in fields related to technology trends increased by a very healthy 15 percent from 2021 to 2022, even though overall global job openings decreased by 13 percent. Applied AI and next-generation software development together created nearly 1 million jobs between 2018 and 2022. Next-generation software development saw the largest increase in employment numbers (exhibit).
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The small multiple of 15 slope chart shows the number of jobs in different fields related to technology trends in 2021-2022. Overall job growth across all fields combined was approximately 400,000 jobs, with applied AI having the highest number of jobs in 2022 at 6%. Increased from 2021. Next Generation Software Development had his second-highest number of job openings in 2022, up 29% from 2021. Other categories shown, from most to least job openings in 2022, are: Cloud and Edge Computing, Trust Architecture and Digital Identity, Future of Mobility, Electrification and Renewable Energy, Climate Technologies Beyond Electrification and Renewables, Advanced Connectivity, Immersive Reality Technologies, Industrialization of Machine Learning, Web3, The future of bioengineering, the future of space technology, generative AI, quantum technology.
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This positive outlook for practitioners in most fields highlights the challenges faced by employers who are struggling to find enough talent to meet demand. The lack of qualified talent remains a persistent limiting factor in the growth of many high-tech sectors, including AI, quantum technology, space technology, electrification and renewable energy. The talent shortage is especially evident with trends such as cloud computing and the industrialization of machine learning, which are required in most industries. This is also a big challenge in areas that employ highly specialized experts, such as mobility and the future of quantum computing (see interactive).
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