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THE TECHNOLOGY TRENDS THAT EXECUTIVES SHOULD KNOW

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THE WALL STREET JOURNAL BUSINESS

Nov 02, 2022

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THE TECHNOLOGY TRENDS THAT EXECUTIVES SHOULD KNOW


WHICH DEVELOPMENTS IN TECHNOLOGY WILL MATTER MOST FOR COMPANIES IN THE YEAR
AHEAD?

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By Michael Chui, Roger Roberts and Lareina Yee, McKinsey & Company

For business leaders, the disruptive power of new technologies makes it ever
more important to keep track of advances in domains such as IT, energy and
materials. By following—and anticipating—a technology’s progression from
scientific research to real-world applications, executives can better decide how
their organizations should invest in developing or using technologies to create
value.

To help execs keep up, we worked with the McKinsey Technology Council—some 100
internal and external experts—to identify and interpret 14 of today’s most
significant technology trends. We looked at such tangible quantitative factors
as investment, research and news coverage to gauge the momentum of each trend.
And we conducted dozens of interviews and extensive research to learn which
industries are apt to benefit most from specific technologies. As we’ll explain,
the resulting study found that all 14 tech trends have the potential for
disruptive impact—and that four “megatrends,” which we highlight below, are
broadly relevant across many sectors.

Tech trends are reshaping every sector. It’s apparent that all sectors are
exposed to changes resulting from technological innovation and the diffusion of
tech-enabled business practices. Looking at 20 sectors, our experts found that
most sectors display a meaningful association with several of the technology
trends we reviewed.



Megatrend #1: Artificial intelligence at scale. Ongoing research means that
capabilities such as machine learning, computer vision and natural language
processing are progressing in sophistication and versatility. As a result, more
and more companies can examine data in ways that help them streamline their
activities, enhance products and services, and make well-informed decisions. The
McKinsey survey highlights AI’s particular relevance to service operations and
product development—business functions that are pivotal for many industries. In
the IT sector, product developers might use AI models to create 3D visuals for
software simulations. An electric utility could train AI models to dispatch
repair crews so they can carry out proactive maintenance. Retailers might boost
sales by using machine learning to crunch purchasing data and give shoppers
personalized recommendations.

Megatrend #2: Advanced connectivity. The latest connectivity protocols and
technologies power networks with more data throughput, higher spectrum
efficiency, wider geographic coverage, less latency and lower energy demands.
These improvements will enhance user experiences and increase productivity in
many industries. Healthcare providers, for example, will find that advanced
connectivity lets them monitor the condition of chronic-disease patients at home
using connected medical devices. Self-driving, connected vehicles are packed
with features that depend on high-quality network access. Both advanced
connectivity and applied AI exemplify trends that are closest to mainstream
adoption because they are built on proven, mature technologies.

Megatrend #3: Sustainable consumption. Companies are beginning to use
technologies to transform products and services so they take less of a toll on
the environment—or even help restore it. In the automotive sector, for example,
electrification is accelerating, and McKinsey estimates there will be a sixfold
increase in worldwide demand for electric vehicles from 2021 to 2030. Companies
along the agriculture value chain are using digital solutions and innovative
practices to produce and distribute food in a more sustainable manner.
Sustainable consumption is one of several technology trends linked with
environmental priorities. The others, which we call “future of clean energy” and
“future of mobility,” also display rising levels of innovation, interest and
investment. In fact, of the 14 trends we studied, the clean energy and mobility
trends attracted the most investment.

Technology trends will not only alter the competitive landscape for businesses,
but also exert powerful effects on society.



Megatrend #4: Digital trust. As organizations amass, manage and analyze more
data, they’re likely to encounter more reputational risk and broaden their
exposure to new compliance requirements. In response, companies are starting to
counter risks, fulfill mandates and reassure stakeholders with a growing suite
of technologies designed to foster digital trust—that is, trust in products and
experiences that leverage AI, digital technologies and data. At the forefront
are businesses in industries that handle highly sensitive data, such as
information technology and electronics, financial services, healthcare, and
aerospace and defense. The movement toward digital trust also relates to a group
of trends based on newer, less-proven digital tools, which will need to develop
further before trends can realize their full potential in multiple sectors.

Combinations of trends can have powerful effects. During the next few decades,
as researchers and engineers bring technologies together in creative ways, the
cumulative effect could be even more powerful than that of individual trends.
Organizations already combine different technologies to create the metaverse and
the many layers that make it up. We expect changes like these will accelerate
and intensify in the years to come, much as they have since the start of the
internet revolution some 30 years ago.

Now’s the time for executives to plan investments. Technology trends will not
only alter the competitive landscape for businesses, but also exert evermore
powerful effects on society: reshaping markets, boosting productivity, spurring
growth, and enhancing lives and livelihoods. The task for executives will be to
make the most of the opportunities that lie ahead. Leaders who understand which
technologies have the most momentum—as quantified by research, funding and
use-case development—can work out which trends they need to act on within the
next several years.

To learn from McKinsey’s latest tech trends research, please visit our
interactive Technology Trends 2022 Outlook on McKinsey.com.

Custom Content from WSJ is a unit of The Wall Street Journal Advertising
Department. The Wall Street Journal news organization was not involved in the
creation of this content.


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