As technology advancements continue to reshape global markets and societies at an unprecedented pace, business leaders are confronted with exciting opportunities and new complexities.
McKinsey’s Technology Trends Outlook 2025 report dives into the latest technology breakthroughs and uncovers the talent challenges, use cases, and the potential impact of technology across sectors. Exploring 13 technology trends that have the potential to transform global business, the report highlights agentic AI, advanced semiconductors, and robotics, among other groundbreaking technologies. The insights in the report can help business leaders decide which technologies are most relevant to their companies, and how they can shape their company strategies to derive value from the innovative technologies.
In this episode of the Future of Asia Podcast series, host Debbi Cheong is joined by the coauthors of the report, Lareina Yee and Michael Chui, and senior partner Vinayak HV to discuss the most pressing technology trends of 2025 globally and in Asia.
Debbi Cheong: Hello. My name is Debbi Cheong. Today, I am joined by three distinguished guests: Lareina Yee, Michael Chui, and Vinayak HV. Before we dive into the questions, could each of you please introduce yourselves?
Lareina Yee: I’m Lareina and I’m a senior partner in McKinsey’s Bay Area office, where I lead the McKinsey Global Institute research on technology.
Michael Chui: I’m also based in the Bay Area office and I’m a senior fellow in McKinsey’s QuantumBlack team.
Vinayak HV: I’m a senior partner based in Singapore. I lead the practice on AI technology and digital across Asia–Pacific.
Debbi Cheong: Michael and Lareina, you coauthored the annual Technology Trends Outlook report this year, which explores several transformative trends driving innovation that have the potential to revolutionize certain global businesses. What are some of the tech shifts you’ve observed, especially compared to last year’s findings?
Michael Chui: One of our goals was to find trends on the technology frontier that are impactful. We need to remember that rarely does that impact sustain for just one year; a lot of the trends that we’re seeing are multiyear. In the report, we have tried to bring to life some of the ways technology continues to evolve and be adopted by enterprises around the world, including in Asia.
That said, some things really popped out this year—for example, agentic AI. Again, we don’t think this is just going to be a one-year event. All of us have been talking about agents recently; we’re just starting on the agentic AI journey.
So, while AI has been with us over the years that we’ve been studying trends, something that clearly came to the surface in the report this year is the idea of agents and foundation models taking more autonomous, multistep actions.
Something else that we highlight is advanced semiconductors. Moore’s Law has underpinned these technologies for decades.1 But now we’re seeing that these chips are really coming to the fore—particularly AI and application-specific semiconductors. For instance, the most valuable company in the world at the moment is a semiconductor company.
Lareina Yee: The purpose of the report is really to look two corners ahead. There are three major categories that we look at in the report. First, the AI revolution, with agentic AI being the standout trend. Second, compute and connectivity frontiers. Echoing Michael, application-specific semiconductors are probably the most interesting topic here, although there are still hidden gems of excellence and excitement in digital trust and cybersecurity. As we build these agents, we want everything to be secure, so we have to really think about identity.
The third theme is cutting-edge engineering. I am particularly excited about robotics. For decades, robotics has been making a huge difference in manufacturing and in our physical spaces. Now, coupled with AI capabilities, new opportunities present themselves for thinking about physical AI or robotics in our workspaces.
Still, it’s important to remember that these are frontier trends. They’re not entirely ready for mass use and there’s still a lot of engineering to be figured out. The purpose of the report is to look ahead, identify the most relevant trends, and then pose questions to CEOs and business leaders about how they might approach these forward investments.
Debbi Cheong: Lareina, on the idea of hidden gems, was there any particular multiyear trend that surprised you?
Lareina Yee: Five or six years ago, cloud and edge computing were the major discussion topics, similar to how AI is now. Yet, scientists and engineers have not stopped thinking about innovation. For example, as we think about GPU-based clouds and AI-based data centers, there are interesting advances in liquid cooling.2
The reason this is a hidden gem is due to the rapid growth in data centers. Data centers are growing 30 percent year on year, I believe. And because AI systems require a lot of computing power, we need smarter, more innovative cooling solutions. This reflects how the overall demand and excitement for AI is lifting the innovation curve in many other areas—maybe inspiring it or directing more focus on multiyear trends that can be studied deeper.
Michael Chui: Things become normalized so easily now. For example, there are plenty of autonomous vehicles today. This used to be startling, but now it is becoming more common to see a car without a driver. As humans, we’re amazed at first and then the amazement becomes normal. Technology trends get hidden because we grow so used to them.
Lareina Yee: Another idea everyone got excited about was AR/VR [augmented reality/virtual reality]. I think, in some ways—I say with caution—it may have been overhyped. Nonetheless, the underlying technology continued to progress. Now with AI, AR/VR technology can be implemented in a simple pair of sunglasses. We’re at the stage where we can take photos, record videos, send messages, and post on media simply by speaking to a pair of sunglasses. This shows how there are some amazing, if somewhat basic, hidden gem technologies in everyday life.
Then there are profound developments that significantly transform the surface and capabilities of businesses, such as having an agentic AI-powered workforce to perform tasks in drug discovery or other activities that would have been impossible to imagine a few years ago.
Debbi Cheong: Let’s dive into Asia in particular. Vinayak, do you see these trends playing out in Asia as well?
Vinayak HV: Indeed, we see these in Asia. The benefit of Asia is its diversity. From Japan to Indonesia, China to India, there are different developments going on. In some ways, these developments are all amplifications of the trends that Lareina and Michael have spoken about.
First is the shift of AI from conversation to action. Looking at regions across Asia, many players—such as in India and the Philippines, which have large offshore hubs and tech services—are experimenting with embedding agent-to-key at scale in terms of automating workflows.
The second factor amplifying these trends is Asia’s super app ecosystem. China has many super apps, and Indonesia, India, and South Korea all have their own versions of them as well. These are significant drivers of consumer behavior.
As Michael and Lareina said, the chips and the semiconductor stack are crucial in AI development, and the majority of the stack is being built in Asia—from memory, in Japan and South Korea, to semiconductor manufacturing in parts of China. I think that is the fundamental foundation driving the innovation and development of AI across the world, but definitely in Asia.
The third aspect amplifying trends, again aligning with Michael and Lareina, is data centers. Given Asia’s geography and the availability of power and land, enormous investment is being made in building data centers to provide these large AI capabilities.
The final aspect is the notion of connectivity, electronic vehicles, and robotics. Parts of Asia have been leading the way not only in investing in advanced connectivity and 5G networks across the world, but also in robotics. For instance, Beijing recently held the Robotics Olympics. It’s very entertaining to see robots trying to play a soccer game, but it’s also very interesting to see the pace at which innovation is happening in advanced robotics.
Equally exciting are the innovations in electric vehicles. The rate at which electric vehicle prices have fallen exemplifies how rapidly these trends are being adopted across different parts of Asia.
McKinsey Technology Trends Outlook 2025
Debbi Cheong: Asia is very diverse, with many different types of demographics within the continent. There are aging populations and younger populations—does that impact the uptake of tech trends? Do you see some variation depending on the composition of people within a country?
Vinayak HV: I’ll focus on two dimensions: first, the language and cultural diversity of Asia. For instance, in India, every part of the country has its own culture. Similarly, Indonesia has a unique blend of cultures across its 17,000 islands. This can sometimes make it difficult to communicate and connect with people.
Live translation capabilities help solve this problem. For example, I was doing store visits and distribution this week. A decade ago, I would have had to be accompanied by a translator. Now, my phone enables me to connect with generations who don’t speak English. Cultural barriers fall away because of the power that exists in our mobile phones and other devices.
The second dimension is age diversity. Countries such as Indonesia, India, and Vietnam have very young populations. These countries show dramatic increases in tech adoption and different changes in behavior, particularly in education systems. My favorite example is my son, who teaches me new use cases for AI every day because he’s constantly experimenting. The same is true across the continent. For instance, looking at search engines and the adoption of AI tools, Indonesia has one of the highest AI overview usage rates, given its population.
On the other end of the spectrum, China and Japan have aging populations. In these countries, healthcare services have challenged themselves to provide the next level of care to an aging population, which is otherwise very difficult to do with the scarcity of labor.
It’s phenomenal to see how Asia’s diversity is enabling an acceleration of different use cases of technology to the benefit of humanity.
Debbi Cheong: I want to shift gear and look at how these emerging technologies impact different industries. Michael, how do you think these technologies are impacting different industries, and what should companies look out for when navigating this new landscape?
Michael Chui: There’s almost a fingerprint if you look across an industry and you map that across the 13 trends—some of these trends are relevant in every industry. Using the AI revolution as an example, every single company in every single industry can take advantage of AI or agentic AI.
Conversely, there are other trends that are more focused on their immediate application, as is the case regarding the future of bioengineering. There are incredible use cases within the industry. Being able to program life enables the creation of new materials. In apparel, artificial spider silk can be used to create fabrics. In agriculture, new materials can help the development of crops that are resistant to climate change and enhance their nutrition and taste.
Altogether, these emerging technologies create a broad footprint across industries, but the impacts are more focused in specific areas. Everything from traditional industries such as oil, gas, and materials, to service-driven areas such as professional and technical services, is affected.
Lareina Yee: For most companies and industries, probably half a dozen of these trends are relevant. Some trends will undoubtedly cut all the way across—for instance, every industry and every company needs a cloud computing layer.
Then, as Michael said, there are trends that are very specific to certain industries, such as space technology. In the report, we talk about the satellite-to-Earth capabilities. We are very excited about some of the launches into space, but also the application to Earth. This trend will have a more limited set of applications for a different industry.
Another more industry-specific trend is quantum computing. This was a banner year for several major corporations that saw significant advances in quantum computing chips. That said, there are still some scientific questions that need to be sorted out. When they are, the main applicability will be for drug discovery in the pharmaceutical industry and for financial services use cases such as cryptography.
Debbi Cheong: What are some of the challenges that companies are facing in applying groundbreaking technologies, and how can they adopt strategies to overcome the challenges?
Michael Chui: These technologies move very quickly, so understanding them is the first step. We publish these reports and articles to help people understand where the frontiers are and what the technical details surrounding them are. There are challenges in talent, understanding, awareness, and many other areas.
For every generation of new frontier technologies, almost 80 percent of the challenges are organizational. Addressing these challenges requires companies to rewire their technology strategies to their corporate strategies. This means aligning for digital and AI, having the right talent in place, and essentially changing the way they operate.
In the context of agentic AI, it’s not about simply applying an agent. Rather, it’s about transforming a workstream or a domain. That goes beyond solely thinking about the technology. Usually that’s the most challenging part, but it’s also one of the most important things to do.
Vinayak HV: Part of this research is trying to understand what’s happening in the lab and how it might play out in the economy. The reality is that there is an increasing gap between the technologies’ capabilities and our understanding of them.
As Michael mentioned, we tend to normalize things very quickly, and organizations have to question whether they are unleashing the full potential of these technologies. In most cases, the answer is no and the reason being, it’s never just tech. Some of the lessons we have learned are that, first, this report is not just about a technology strategy, an AI strategy, or a digital strategy. It’s about company strategy, focusing on business domain reimagination.
The second lesson is that it is essential to find the right balance of talent relevant to the company’s needs. This can include AI talent, cloud computing infrastructure talent, and others. But ultimately, it’s about ensuring there are people in the organization who know how to unleash the potential of the technology.
However, what matters even more is moving the rest of the organization forward. In a large organization of perhaps a 100,000 employees, having a group of technical talent is necessary, but the real challenge lies in bringing the rest of the employees along.
The third lesson is that every advance in technology increases complexity on two levels: technically and organizationally. Agentic AI, for example, increases technical complexity in process management. When multiple agents interact, each operates probabilistically. Even a 1 percent error could propagate to a 25 percent error at the end of the process.
Organizationally, agentic AI raises questions about the future of an organization’s structure. Are agents going to work alongside humans? Will humans manage teams of agents? Will there be agents, in some cases, managing teams of humans? The challenge is figuring out how this hybrid collaboration model will work for specific organizations. This requires rethinking the organizational and operational models and building new skill sets.
This is often what gets in the way of enterprises realizing the full value of technological advances. It’s easy to get excited about the technology, but it’s never just about tech. To get it right, organizations need to align business transformation, organizational structure, and operating models, and invest in talent.
Debbi Cheong: Lareina, if there were one takeaway for our listeners, what should it be?
Lareina Yee: Don’t wait on the sidelines. Often, business leaders say, “Wow, that’s really interesting. Maybe I should watch someone else run that play first, and I’ll be a fast follow.” Quite frankly, there have been many technology errors where that has proven to be the right thing to do. But, with the developments that have happened in recent years, I don’t think you can wait on the sidelines. Get in the game and run with the ball. You have to compete to win.
Technology is incredibly transparent right now and the tools are very accessible. Your ability to take some subset of the themes and technologies that we profiled in the report and use it to create real competitive distance—that’s the mission.
