What: McKinsey reviews the state of tech in 2024 and its various deployments in several industries

Why it is important: companies invest more in applied AI than in generative AI so far.

The McKinsey Technology Trends Outlook 2024 identifies sustained growth and strategic shifts in the technology sector despite economic headwinds. The report focuses on 15 technology trends, highlighting the expansive rise of generative AI (gen AI) and electrification & renewables as leaders in innovation, investment, and industry application.

Gen AI, in particular, has seen a 700% increase in interest from 2022 to 2023, with large language models (LLMs) expanding their 'context windows' from 100,000 to two million tokens, significantly enhancing their complexity and utility across various data modalities. This surge in capability has driven a similar leap in investments and has seen these technologies being incorporated into enterprise applications ranging from customer service to advanced computing systems.

On the other hand, electrification and renewables continue to attract attention and funding, outpacing other technologies in investments and interest scores, underscoring their importance in the current economic landscape driven by decarbonization efforts and energy security needs.

Despite a downturn in technology equity investments in 2023, falling by 30-40% to around $570 billion, the sector's innovation pace has not slowed, particularly within AI and machine learning domains. The report notes a significant talent demand across the technological landscape, with a notable skills gap persisting despite an overall 8% increase in job postings from 2021 to 2023.

The 2024 McKinsey Tech report