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McKinsey’s Technology Council, which was set up in 2020, has identified 10 disruptive technologies covering digital technology, clean technology and next-generation materials.
McKinsey said its Technology Council has been set up to scout technologies that will have a substantial impact on both the profit and loss, and capabilities of companies over the next five to 10 years.
The global management consulting firm hopes to offer business executives with insights into where they need to focus their efforts. Seven out of the 10 areas identified fall into the digital domain.
According to Ivan Ostojic, a partner at McKinsey who leads innovation practice at the consultancy, business executives are tracking technological developments earlier and earlier in their adoption cycles. He said that many want to understand which domains the technology will likely disrupt and the value it can offer business.
For instance, he said pharmaceuticals are likely to invest a far larger proportion of their research and development budgets in silicon, which suggests far more pharmaceutical research is likely to be run using computer models than in laboratories.
The council predicted that robotics, the industrial internet of things (IIoT), digital twins and additive manufacturing will combine to streamline routine tasks, improve operational efficiency and accelerate time to market. McKinsey describes this trend as next-level process automation and virtualisation.
According to McKinsey, by 2025, more than 50 billion devices will be connected to the IIoT, generating 79 Zbytes of data annually. By 2030, McKinsey said that 10% of manufacturing will be replaced by additive processes such as 3D and 4D manufacturing.
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McKinsey also expects quantum computing and blockchain to break through as mainstream technology. It forecast that by 2035, the value generated by quantum computing applications will surpass $1tn.
By 2027, McKinsey predicted that 10% of global gross domestic product (GDP) could be associated with blockchain.
Predictably, artificial intelligence and machine learning are among the technology trends McKinsey believes will shape the technology strategy across many industries. Application areas include using technology such as natural language processing, machine vision and speech technology for rapid development cycles, improving custom insights, and reducing repetitive tasks.
As more data is pushed into the cloud, Ostojic said this will drive the need to develop data-driven applications quicker, leading to what McKinsey refers to as “Software 2.0”. This covers technologies like automatic coding tools. To take advantage of automated programming, McKinsey suggested that businesses will need to scale up their DataOps and MLOp capabilities.
Ostojic said that business leaders need to have a portfolio of emerging technologies, to help them spot which ones can be deployed to deliver a competitive advantage, and which ones present a risk to their business.
One of the challenges widely recognised in testing emerging technologies is that a large proportion of projects fail to make it into production. “People try to extrapolate pilots,” said Ostojic.
He suggested that businesses need to start from the top down, with what he describes as “domain transformation”. For instance, transforming an end-to-end supply chain is dependent on both a technology initiative and a business transformation exercise to solve a problem.