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By Lareina Yee, Michael Chui, and Roger Roberts with Mena Issler from McKinsey Digital
McKinsey technology trends outlook 2024
Full Report (100 pages)
Which technology trends matter most for companies in 2024? New analysis by the McKinsey Technology Council highlights the adoption, development, and industry effects of advanced technologies.
Despite challenging overall market conditions in 2023, continuing investments in frontier technologies promise substantial future growth in enterprise adoption. Generative AI (gen AI) has been a standout trend since 2022, with the extraordinary uptick in interest and investment in this technology unlocking innovative possibilities across interconnected trends such as robotics and immersive reality. While the macroeconomic environment with elevated interest rates has affected equity capital investment and hiring, underlying indicators—including optimism, innovation, and longer-term talent needs—reflect a positive long-term trajectory in the 15 technology trends we analyzed.
These are among the findings in the latest McKinsey Technology Trends Outlook, in which the McKinsey Technology Council identified the most significant technology trends unfolding today. This research is intended to help executives plan ahead by developing an understanding of potential use cases, sources of value, adoption drivers, and the critical skills needed to bring these opportunities to fruition.
Our analysis examines quantitative measures of interest, innovation, investment, and talent to gauge the momentum of each trend. Recognizing the long-term nature and interdependence of these trends, we also delve into the underlying technologies, uncertainties, and questions surrounding each trend. (For more about new developments in our research, please see the sidebar “What’s new in this year’s analysis”; for more about the research itself, please see the sidebar “Research methodology.”)
The two trends that stood out in 2023 were gen AI and electrification and renewables. Gen AI has seen a spike of almost 700 percent in Google searches from 2022 to 2023, along with a notable jump in job postings and investments. The pace of technology innovation has been remarkable. Over the course of 2023 and 2024, the size of the prompts that large language models (LLMs) can process, known as “context windows,” spiked from 100,000 to two million tokens. This is roughly the difference between adding one research paper to a model prompt and adding about 20 novels to it. And the modalities that gen AI can process have continued to increase, from text summarization and image generation to advanced capabilities in video, images, audio, and text. This has catalyzed a surge in investments and innovation aimed at advancing more powerful and efficient computing systems. The large foundation models that power generative AI, such as LLMs, are being integrated into various enterprise software tools and are also being employed for diverse purposes such as powering customer-facing chatbots, generating ad campaigns, accelerating drug discovery, and more. We expect this expansion to continue, pushing the boundaries of AI capabilities. Senior leaders’ awareness of gen AI innovation has increased interest, investment, and innovation in AI technologies, such as robotics, which is a new addition to our trends analysis this year. Advancements in AI are ushering in a new era of more capable robots, spurring greater innovation and a wider range of deployments.
Electrification and renewables was the other trend that bucked the economic headwinds, posting the highest investment and interest scores among all the trends we evaluated. Job postings for this sector also showed a modest increase.
Although many trends faced declines in investment and hiring in 2023, the long-term outlook remains positive. This optimism is supported by the continued longer-term growth in job postings for the analyzed trends (up 8 percent from 2021 to 2023) and enterprises’ continued innovation and heightened interest in harnessing these technologies, particularly for future growth…
Read the rest of the article to learn about the key technology trends shaping 2024: McKinsey Technology Trends Outlook 2024
The McKinsey Technology Trends Outlook 2024 highlights the rapid growth driven by frontier technologies like generative AI, robotics, and electrification. Staying informed is essential for companies navigating this landscape. TechTalk Summits' events connect you with industry leaders and cutting-edge insights into how these trends are shaping the future.
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About the Authors:
Lareina Yee writes and speaks on technology and diversity. In her role as chair of the McKinsey Technology Council, she recently published the firm’s annual “Technology Trends Outlook”, “The Economic Potential of Generative AI” and “The CEO’s Guide to Generative AI” each of which examine long-term technology shifts and their implications for different industries.
Dr. Michael Chui is a partner at the McKinsey Global Institute (MGI), McKinsey's business and economics research arm. He leads research on the impact of disruptive technologies and innovation on business, the economy, and society.
Roger Roberts helps clients conceive and apply technology solutions to enhance innovation and productivity. He helped found our IT practice (the Business Technology Office) on the West Coast in 1998 and serves clients primarily in the retail, consumer, and technology sectors.
