The world is experiencing a time of increased momentum and investment in emerging technologies. In this episode of The Future of Asia Podcast, McKinsey senior partners Vinayak HV and Lareina Yee discuss the implications of global technology trends, particularly in Asia. Being confident, ambitious, and creative, helping people learn, and recognizing when to scale, are some of the key takeaways from their conversation.
An edited version of their conversation follows.
Debbi Cheong: Hello everyone, and welcome to McKinsey’s The Future of Asia Podcast. I’m Debbi Cheong and I’m your host for this episode. Today, we will be looking at global technology trends and discussing which of them matter the most for Asian companies in 2023. Joining me on this episode are two very distinguished guests, Vinayak HV and Lareina Yee. Vinayak is a senior partner in McKinsey’s Singapore office and the leader of McKinsey Digital in Asia–Pacific. Lareina is a senior partner in the Bay Area office, coleader of the Technology, Media, and Telecommunications Practice, and chair of the McKinsey Technology Council.
It’s great to have you both with us today. Before we delve in, Lareina, could you give us a brief overview of some the major technology trends you have noticed this year—not just in the region, but globally as well?
Lareina Yee: We have looked at over 100 different types of technologies and have tried to consolidate them into 15 major technology trends that will be with us over the next decade or more. It’s a really diverse list of technologies. There has been increased momentum in terms of investment and interest in the deployment of some of these emerging technologies over the past couple of years. This includes everything from technologies that are building our digital future to thinking about “low code, no code”; from next-generation software development to how we think about trust architecture. It also includes the compute and connectivity work that we are trying to advance—from edge computing to quantum computing to immersive reality technologies, like augmented reality (AR) and virtual reality (VR), to what drives a sustainable world.
One of the things that we’ve spent a lot of time looking at is space technology—how it can be applied in space, but also its implications for what we do here on Earth. But all of you are probably waiting for me to say “generative AI.” By no doubt, that was the winner of the year in terms of the most interesting new technology. That being said, we have been looking at the AI revolution for several years, which has been fascinating—applied AI, analytical AI, and all of the work in machine learning operations, for example.
Debbi Cheong: Vinayak, where does Asia fit into these technology trends? How is the region helping to advance trends such as generative AI, for example?
Vinayak HV: I’m incredibly optimistic and bullish about the potential of Asia and the role that the region can play in terms of furthering the advancement of technology. I’m bullish for a few different reasons. First, Asia is a place where there is a massive demographic dividend. If you look at a country such as India, more than 75 percent of the science, technology, engineering, and math (STEM) graduates in the region have come from there over the past few years.
The second reason is the pace of innovation in Asia. The region accounted for about 86 percent of patents that were filed over the past few years. China alone accounts for about 26 percent of unicorns.
The final reason is that, with every technology wave, Asia has shown the potential to leapfrog. Technology can make such a difference to consumers’ lives in Asia. Consumers are very open to adopting new technology, particularly in fast-growing, GDP-per-capita economies such as India and Indonesia. We saw this with the mobile phone revolution and, back in the day, with technologies such as WhatsApp and BlackBerry Messenger. I believe there is a massive hunger in the region to advance the full potential of technology.
I’m optimistic about the potential difference these technology trends can make to the economies and people in Asia, to individual consumers’ lives, and also in empowering new, world-class enterprises.
Lareina Yee: One of the most astounding things about these technologies is that they are pushing the frontiers of economic growth. If we put generative AI together with the basket of automation technologies, we’re looking at a potential of $4.4 trillion of GDP growth globally. That is larger than the size of the United Kingdom.
Also, generative AI and many of these other technologies are catalysts in terms of what we do and how we work. For example, in 2017 we looked at how automation technologies affected GDP. When we reran that analysis this year and looked at the difference that generative AI is making, we found that the ability to capture some of that GDP has advanced by a decade with generative AI.
McKinsey Technology Trends Outlook 2023
Debbi Cheong: What are the practical ways in which businesses could approach this new digital age? Why should business leaders pay attention to these tech trends? And what advice would you give to CEOs who are looking to go all in to this new digital age?
Lareina Yee: I think this is all about the scale of deployment and having bold aspirations. We can all tinker with technology as it’s fun and exciting; you can certainly spin up a pilot pretty quickly. But the question leaders need to ask is, “How do we think about technology in relation to our growth strategy, and how can technology be the rocket ship to help us accelerate our business goals?” When business goals are put together with the power of some of these emerging technologies, that’s where you get outsized results. Companies need to have the fortitude and commitment to achieve at-scale deployments. This doesn’t mean that 100 users are on it; it’s more like 100,000. That’s when you start to move productivity numbers.
I think the second thing that’s really important for leadership to consider are the advancements that have been made in AI alone over the past five or six years. These have changed job opportunities. One of the things that we looked at in this year’s report is total global job postings. We noticed there was a 13 percent decline across job postings but a 15 percent increase in technology-related jobs, all tied to these 15 trends we have talked about.
To connect the decline in some jobs and the growth in tech jobs, leadership and corporates have a responsibility to help people to be able to manage and utilize these technologies. For example, today you can apply to be a prompt-on engineer or a machine-learning specialist—jobs that weren’t available when I went to college. For me to be able to apply for those, I would need help.
Vinayak HV: I have a few things to add to that. First, I think it’s important for every CEO and business leader to fully recognize that the pace of technology change is going to continue accelerating. Just acknowledging that, no matter which industry you’re in, goes a long way.
The other thing that I think is important for CEOs and business executives to keep in mind is the notion of sensing. We have tried to quantify the 15 technology trends in terms of scale of impact, as well as pace of innovation. I think it’s important to be aware of how technologies might change—for example, quantum—but also have a mechanism within your institution to sense different technologies and know when it is the right time to scale.
Another thing is the notion of learning. I’m a firm believer that everybody can learn. There are people who are 80 years old in India currently ordering groceries using e-commerce. I think it’s incumbent on business leaders to create an environment in which everybody can learn and thrive. I also believe that the nature of jobs will change. When I think about what my kids will grow up learning, I can’t define what kind of jobs they will end up having. But I know that as long as they keep learning, they will be fine. The same applies to all of us.
There are three important characteristics that I always tell CEOs and business leaders who are wondering how to grapple with technology trends. One, the need to be optimistic. I think it’s very easy to get pessimistic about the impact of technology.
Two, the notion of confidence. This technology is something that is available to everyone—it is a matter of fortitude, aspiration, and being able to embrace the change. And three, we need to be responsible, particularly with generative AI. I think there are many unresolved questions that we as a society are having to grapple with. Having responsible adults to make the decisions is going to be important. So, to sum up: be optimistic, confident, and responsible.
Debbi Cheong: What is the one key takeaway that you would like to tell our listeners? Lareina, do you want to start off first?
Lareina Yee: I love to emphasize the power of creativity and technology. We’ve been looking at each of these technologies such as applied AI, advanced connectivity, and next-generation software. Their real power is the creative way in which people—who are building new frontiers—combine them to create new ways in which we work and live. Just think about how many of these technologies are embedded in an electric car, or in the ability to mitigate human error in surgery, or when using robotics. These are amazing things that help our day-to-day work and lives.
Vinayak HV: I believe technology is a tool, an enabler. The point that I want to emphasize to every person listening to this podcast is that every individual, every institution, every economy, and every society has the potential to win and to be successful. What it comes down to is the position that each institution takes to any emerging technology and how it enables scaling and learning across the entire organization.
Debbi Cheong: Thank you for joining us on The Future of Asia Podcast and I hope to see you all again on the next episode.
This content was originally published here.
