Which Tech Trends Matter Most for Companies in Immediate Term?

Technology continues to be a primary catalyst for change in the world; its advances give businesses, governments, and social-sector institutions greater possibilities to lift their productivity, invent and reinvent offerings, and contribute to humanity’s well-being. And while it remains difficult to predict how technology trends will play out, executives can plan ahead better by tracking the development of new technologies, anticipating how companies might use them, and understanding the factors that affect innovation and adoption.

To that end, the McKinsey Technology Council has worked to identify and interpret some of the most significant technology trends unfolding today. The analysis examines such tangible factors as investment, research activity, and news coverage to gauge the momentum of each trend. Below, we lay out these considerations for the latest trends, so that you can better understand them and consider how they relate to your organization. 

1. Generative AI: The rise of generative AI has the potential to be a major game-changer for businesses. By enabling automation, it has the potential to increase efficiency and productivity, reduce costs, and open up new opportunities for growth. Products like ChatGPT and GitHub Copilot, as well as the underlying AI models that power such systems (Stable Diffusion, DALL·E 2, GPT-3, to name a few), are taking technology into realms once thought to be reserved for humans. These are still early days, but some clear use cases for generative AI have already emerged. Within product innovation, marketing, and sales and customer experience in particular, the technology can have significant outcomes and may be more feasible to implement in the short term compared with other areas in the value chain.

2. Applied AI: After decades of extravagant promises and frustrating disappointments, artificial intelligence (AI) is finally starting to deliver real-life benefits to early-adopting companies. For example, retailers on the digital frontier rely on AI-powered robots to run their warehouses — and even to automatically order stock when inventory runs low. Utilities use AI to forecast electricity demand. Automakers harness the technology in self-driving cars. Models trained in machine learning can be used to solve classification, prediction, and control problems to automate activities, add or augment capabilities and offerings, and make better decisions. Investment: $165 billion in 2021.

3. Advanced connectivity: The world’s digital connections are about to become broader and faster, creating a platform for every industry to innovate and boost productivity. While 5G networks promise ultra-high speeds, low latency, and greater reliability, the 5G revolution is only one part of the story. There’s also an evolution in existing technologies, with new generations of fiber, cable, Wi-Fi, and short-range technologies. 5G/6G cellular, wireless low-power networks, low-Earth-orbit satellites, and other technologies support a host of digital solutions that can drive growth and productivity across industries. Investment: $166 billion in 2021.

4. Future of mobility: In 2022, mobility shifted away from major new announcements and concepts and toward a sharpened focus on implementation and scaling. Traditional OEMs and tier-one suppliers remained preoccupied with the short-term effects of supply chain issues and the transition to electric vehicles. Disruptors marched ahead — but faced increasing consolidation. Meanwhile, regulators continued to pressure players to decarbonize more quickly. Cities ramped up their urban-mobility initiatives. And consumer interest in sustainable (and shared) mobility accelerated further and will almost certainly continue to accelerate. The industry landscape will have a very different shape beyond 2030. But the next 18 to 24 months could indicate who the winners on the other side of that transformation might be. Investment: $236 billion in 2021.

5. Future of clean energy: Clean-energy solutions help drive toward net-zero greenhouse-gas emissions across the energy value chain, from power generation to power storage and distribution. Investment: $257 billion in 2021.

6. Future of sustainable consumption: Sustainable consumption involves transforming industrial and individual consumption through technology to address environmental risks, including climate change. Investment: $109 billion in 2021.

7. Future of bioengineering: Converging biological and information technologies improve health and human performance, transform food value chains, and create innovative products and services. Investment: $72 billion in 2021.

8. Web3 marks a third phase of the internet and a reversal of the current status quo for users. It includes platforms and applications that enable shifts toward a future, decentralized internet with open standards and protocols while protecting digital-ownership rights, providing users with greater ownership of their data and catalyzing new business models. Investment: $110 billion in 2021.

9. Cloud and edge computing: It involves distributing computing workloads across remote data centers and local nodes to improve data sovereignty, autonomy, resource productivity, latency, and security. Investment: $136 billion in 2021.

10. Industrializing machine learning: Industrialized machine learning (ML) uses software and hardware solutions to accelerate the development and deployment of ML and to support performance monitoring, stability, and ongoing improvement. Investment: $5 billion in 2021.

When I look at these trends, what impresses me more than anything else is the massive effect that technology will have on every sector. The next few decades promise to be a time in which technologies progress ever more quickly from science to engineering to impact — at scale, and around the world. I also expect to see the multiplying effect of “combinatorial innovation,” as different technologies come together in creative ways. 

Changes like these will accelerate and intensify in the years to come, much as they have during the roughly three decades since the start of the internet revolution. The changes will not only alter the competitive landscape but also exert evermore powerful effects on society: reshaping markets, boosting productivity, spurring economic growth, and enhancing lives and livelihoods.