14 advanced technologies shaping the future

Which technological trends will be most important to businesses in 2022? The McKinsey Technology Council has released new research focusing on cutting-edge technology's advancement, potential applications, and business impacts.

Technology is still one of the main drivers of global change. Businesses, governments, and organizations in the social sector have greater opportunities thanks to technological advancements to increase productivity, develop new products and services, and improve humanity. Although it is still impossible to forecast how technological trends will develop, CEOs may plan more effectively by keeping track of new technology developments, speculating on potential applications, and comprehending the factors influencing innovation and adoption.

The study, which builds on the trend research McKinsey shared last year, identifies and interprets 14 of the most important technology trends currently in play. The 14 technology trends' aspects are listed below so you can better comprehend them and think about how to implement them:

1. Applied AI

Machine learning models can automate processes, add or enhance capabilities and offers, and improve decision-making by resolving classification, prediction, and control issues. Intelligent applications of applied AI are used to automate, enhance, or add to real-world commercial use cases by resolving classification, prediction, and control issues. Business adoption of AI technologies across use cases is increasing as these technologies quickly expand the boundaries of innovation.

This technology attracted $165B in investment last year.

2. Advanced connectivity

Various digital solutions that can boost growth and productivity across industries are supported by technologies, including 5G/6G cellular, wireless low-power networks, low-Earth orbit satellites, and others.

Various digital solutions are supported by 5G/6G cellular, wireless low-power networks, low-Earth-orbit satellites, and other technologies. These solutions can aid networks in expanding their geographic coverage, decreasing latency, conserving energy, boosting data throughput, and improving spectrum efficiency. Consumers now have improved quality networks, and industry players have access to new use cases.

This technology attracted $166B in investment last year.

3. Bioengineering

The convergence of biological and information technology enhances human performance and health, changes the food value chains, and produces new goods and services.

New products and services could be developed by businesses to meet demands in a variety of industries, including healthcare, food and agriculture, consumer goods, sustainability, and the generation of energy and minerals, thanks to advances in biology and digital technology. According to McKinsey research, 400 bioengineering use cases, practically all technologically possible, could have an economic impact of $2 trillion to $4 trillion per year from 2030 to 2040. While some gene therapies and bioproducts have acquired popularity, more ethical, legal, and social challenges must be resolved before bioengineering can reach its full economic potential.

This technology attracted $72B in investment last year.

4. Clean energy

Through power generation, storage, and distribution, clean energy solutions contribute to the goal of net-zero greenhouse gas emissions throughout the energy value chain.

The energy value chain, from generation or production to storage and distribution, is covered by energy solutions that work toward net-zero emissions. Long-lasting battery systems, smart grids, sustainable fuels like hydrogen, and renewable energy sources like solar and wind power are a few of the solutions that are becoming more and more crucial. By 2035, according to McKinsey, yearly investments in energy supply and production might treble to around $1.5 trillion, with a possible shift toward non-fossil and decarbonization technologies. Overall, switching to clean energy would bring about significant changes in both energy-intensive and energy-producing industries. Although capacity and reliability issues can hinder the adoption of sustainable energy, rising capital spending and stronger regulatory backing might hasten it.

This technology attracted $257B in investment last year.

5. Mobility

The goal of mobility technologies is to increase the sustainability and effectiveness of ground and air transportation for people and cargo.

More than a century after mass production of automobiles began, mobility has arrived at a second great inflection point: a shift toward autonomous, connected, electric, and smart (ACES) technologies. This shift promises to disrupt markets while improving the efficiency and sustainability of land and air transportation of people and goods. ACES technologies for road mobility saw significant adoption during the past decade, and the pace could accelerate because of sustainability pressures. Advanced air-mobility technologies, on the other hand, are either in the pilot phase (for example, airborne-drone delivery) or remain in the early stages of development (for example, air taxis) and face some concerns about safety and other issues.

This technology attracted $236B in investment last year.

6. Sustainable consumption

Sustainable consumption entails altering industrial and individual consumption through technology to address environmental threats, such as climate change.

Utilizing products and services that are made with little negative environmental impact through the use of low-carbon technology and sustainable materials is known as sustainable consumption. Consumption that is sustainable on a large scale is essential for reducing environmental hazards, such as climate change. Producing sustainable products and services can help businesses comply with new requirements, foster prospects for growth, and draw in talent. Although several technically sound solutions promote sustainable consumption, few have been made affordable enough to be implemented on a large scale. The push for global decarbonization and the rise of a generation of customers eager to alter their purchasing habits could hasten their acceptance.

This field attracted $109B in investment last year.

7. Web3

A future decentralized internet with open standards and protocols is made possible by Web3's platforms and apps, which also preserve digital ownership rights, give users more control over their data and encourage the developing of new business models.

With Web3, consumers will have more control over how their data is used for commercial purposes and a stronger sense of ownership over digital assets. Web3 refers to a future model for the internet that decentralizes power and redistributes it to users. Additionally, it offers a variety of business opportunities, including new services involving digital programmable assets and new business models governed by decentralized autonomous organizations (DAs), which are enabled by eliminating intermediaries through secure (smart contract) automation. Although Web3 has generated much broad interest, incumbent companies have only partially adopted it for several reasons. As a result, Web3 has drawn substantial amounts of funding and engineering talent, yet, scaling and testing of workable business models are still ongoing. Early adopters encounter difficulties, such as ambiguous and changing regulations and immature and new technological platforms that frequently offer a worse user experience than current Web2 utilities.

This technology attracted $110B in investment last year.

8. Industrialized machine learning

Industrialized machine learning (ML) uses hardware and software solutions to assist in performance monitoring, stability, and continuous improvement, as well as to speed up the development and implementation of ML.

Industrializing machine learning (ML) entails building a stack of interoperable technical tools for automating ML and expanding its use so businesses can use its full potential. ML technologies can assist businesses in making the transition from prototypes to commercially viable products, fixing production-level modeling errors, and overcoming team capacity and productivity constraints. According to experience, companies that successfully industrialize ML can cut the time it takes to produce ML applications (from proof of concept to product) by 90% and save up to 40% on development costs. While a few notable businesses have led the way in industrializing aluminum, we anticipate that as more businesses look to employ aluminum for an increasing range of applications, its use will become more widespread.

This technology attracted $5B in investment last year.

9. Immersive-reality technologies

Using sensor technology and spatial computing, immersive reality technologies enable users to "see a new world" through virtual or mixed reality.

Different levels of immersion are offered by augmented reality (AR), virtual reality (VR), and mixed reality. Immersive-reality technologies use spatial computing to interpret physical space, simulate the addition of data, objects, and people to real-world settings, and enable interactions in virtual worlds (MR). The second-highest amount ever in 2021, venture capital investors funded AR and VR start-ups to the tune of $4 billion (behind 2018). This signals the creation of new applications for various industries, putting the global industry on track to expand by about 20% annually and laying the groundwork for a trillion-dollar market over the next ten to fifteen years. But for the time being, adoption is limited by a variety of factors, including the need for technological advancements, such as improvements in the feature sets, battery life, weight, and ergonomics of wearable immersive-reality devices, as well as the maturity of the development tool chain necessary to produce fantastic immersive experiences efficiently.

Immersive-reality technologies attracted $30B in investment last year.

10. Cloud and edge computing

Cloud and edge computing aim to increase data sovereignty, autonomy, resource productivity, latency, and security by distributing computing workloads among distant data centers and local nodes.

A variety of progressively broader and richer services are made possible by cloud platforms constructed from hyper-scale data centers that offer and enable huge computation and storage capacities. These platforms increasingly include computational and data resources in their facilities or at network edge nodes close to end users. In real-time systems like warehouse automation, low latency—or minimal processing delays—is a requirement satisfied by these edge resources. Additionally, mobile applications like those for automobiles use edge resources more frequently. By continuing to integrate cloud and edge resources, users will be able to extend the speed and quality of the cloud to edge and real-time systems, speeding up innovation, increasing productivity, and producing commercial value.

These technologies attracted $136B in investment last year.

11. Trust architectures and digital identity

Building, scaling, and maintaining stakeholder trust in using their data and digitally enabled goods and services are made possible by digital trust technology.

Organizations can use digital-trust solutions to manage technology and data risks, boost innovation, and preserve assets. Additionally, incorporating trust into data and technology governance can improve customer interactions and corporate performance. Zero-trust architectures (ZTAs), digital identity systems, and privacy engineering are some underlying technologies. Other technologies contribute to the development of trust by assuring Al models' security, neutrality, and explainability. The adoption of digital-trust technology has been slowed by several issues, including organizational silos, integration difficulties, and a skill shortage. It takes top-down leadership and purposeful adjustments to many different areas of activity, from strategy and technology to user adoption, to create a holistic trust-first risk mentality and capabilities.

These technologies attracted $34B in investment last year.

12. Space technologies

Satellite, launcher, habitation technology advancements, and cost reductions enable creative space activities and services.

Cost reductions enabling new capabilities and applications to be more widely used have been the most significant advancement in space technologies over the previous five years. Reduced satellite and launch vehicle size, weight, power, and cost have been major factors in component cost reduction. As a result of these cuts, system topologies have changed, moving away from singular, massive geosynchronous equatorial satellites and toward smaller, more evenly distributed low-Earth orbit satellites. Today, remote sensing analytics and space technologies are widely used, and research indicates that the space sector may be worth more than $1 trillion. In addition to scalable human spaceflight, the future space economy might also include activities that aren't currently being pursued in space on a large scale, like in-orbit manufacturing, power generation, and space mining. With more government and private lunar missions expected to take place in the upcoming years—missions that have also sparked technological advancements from sectors outside the space sector—many people also envision the growth of a cislunar economy.

These technologies attracted $12B in investment last year.

13. Quantum technologies

For some applications, quantum-based technologies could exponentially boost computational performance. They could also change networks by enhancing their security.

With the help of quantum technologies, it is hoped that specific sorts of difficult calculations can be completed considerably more quickly than with conventional computers, networks can be transformed by increasing their security, and sensor sensitivity can be significantly increased. In theory, quantum technologies could create simulations and find solutions that would result in significant advancements in fields, including pharmaceuticals, information technology, chemicals, aerospace and defense, and chemicals. However, because some technological hurdles still need to be cleared before fully error-corrected computers and scalable networks can be developed, potential consumers of quantum technologies should be ready for an ambiguous adoption roadmap.

Quantum technologies attracted $3B in investment last year.

14. Next-generation software development

The development of software applications is aided by next-generation technologies, including platforms with little or no code and development and testing methods supported by artificial intelligence.

Every phase of the software development life cycle (SDLC), from planning and testing to deployment and maintenance, is being transformed by next-generation technologies, making it possible for an increasing number of non-technical workers to develop applications. Al pair programmers, low-code and no-code platforms, and automated testing are some of the technologies that can assist in simplifying complex operations and boil down others to a single command. Technical difficulties, the requirement for an extensive developer and test engineer retraining, and organizational obstacles could cause adoption to go slowly. However, the new technologies might make it possible for engineers and non-engineers to create applications quickly, accelerating digital transformation, bringing about productivity gains, and reducing the need to draw from a limited, competitive pool of engineering talent when hiring new employees.

This field attracted $2B in investment last year.