McKinsey advisory council highlights huge impact of tech on business

Research from McKinsey has highlighted the massive impact that technology is having across all industry sectors. Its latest Technology trends outlook 2022 report identifies 14 significant tech trends, based on research among McKinsey partners and more than 70 leading scientists, entrepreneurs and researchers who make up the McKinsey Technology Council. 

Applied artificial intelligence (AI) and advanced connectivity feature highly in the analysis of tech trends, while areas such as quantum computing and next-generation software development have scores with lower adoption rates and council members are unsure of the business impact such technologies will make.

“When we look at these trends, what impresses us more than anything else is the massive effect that technology will have on every sector,” the report’s authors said. They predicted that over the next few decades, technology development is likely to progress ever more quickly from science to engineering to impact – at scale, and around the world.

“We also expect to see the multiplying effect of ‘combinatorial innovation’ as different technologies come together in creative ways,” they said.

Looking at advanced AI, McKinsey partner Jacomo Corbo said: “The biggest shift affecting AI’s broad adoption is tied to more mature tooling and the emergence of a canonical tech stack that is drastically simplifying how AI solutions are engineered and integrated with other digital applications. AI is quickly becoming more consumable, and solutions that use AI are accessible even to organisations with few to no AI engineers of their own.”

According to McKinsey, barriers to adoption of advanced AI include the availability of resources, such as talent and funding and cyber security concerns, notably those related to data risks and vulnerabilities. “Companies may also face questions from stakeholders about the responsible, trustworthy use of AI, touching on such issues as data governance, equity, fairness and ‘explainability’,” said the report’s authors.

“Those questions may prompt policy-makers to establish regulations and compliance requirements that affect AI research and applications.”

In terms of advanced communications, the report’s authors pointed out that new protocols and improvements in bandwidth offer improvements to user experiences and increase productivity in industries such as mobility, healthcare and manufacturing. In the report, McKinsey noted that companies have been quick to adopt advanced connectivity technologies that build on existing standards. However, the report’s authors also said newer technologies such as low-Earth-orbit (LEO) connectivity and private 5G networks have seen less uptake to date.

McKinsey believes that ongoing adoption of advanced connectivity will depend in part on the scale of capital investments in networks supporting some technologies, such as high-band 5G and LEO satellites, and on the development of business ecosystems capable of providing services and solutions. “Operators also need to find viable business models for some connectivity technologies,” it said.

McKinsey believes next-generation software development promises to benefit nearly every industry. The report’s authors said the sectors that are adopting these technologies share similar qualities – process-heavy operations, significant needs for custom software solutions, and rapid innovation cycles. However, they noted that the cost–benefit balance of low-code and no-code development platforms is not yet apparent and may not favour all types of software application.

Another factor that could limit adoption of next-generation software development tools concerns intellectual property and code quality. “Applications based on auto-generated code could be less secure, defects and inefficiencies might escape automated code reviews, and there could be intellectual property issues regarding AI-written code,” the report’s authors warned.