This week, our new global survey reveals how some respondents are scaling up artificial intelligence so it has impact. Plus, changes ahead in luxury mobility, and the winner of this year’s Financial Times and McKinsey Business Book of the Year Award—just in time to grab a great read for the holidays. |
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As we know, the adoption of any new tech tends to follow the well-trod path of the beloved S-curve. Take the current upsurge of AI. The small set of power users who’ve already placed big bets is expanding swiftly. More are joining, snatching up gains and narrowing opportunities for latecomers. |
The newly released “Global AI Survey: AI proves its worth, but few scale impact” looks at AI adoption across industries, regions, and capabilities, and the research bears out the instincts of those early movers. As in last year’s survey, we asked respondents about their companies’ use of nine AI capabilities. Fifty-eight percent of respondents say their organizations have embedded at least one AI capability into a process or product in at least one function or business unit, up from 47 percent in 2018—a sign that AI adoption in general is becoming more mainstream. |
A majority of respondents also report that in the business areas that deploy AI, their revenues are up, and 44 percent say the tech is bringing costs down. We’re not talking chump change: AI-powered applications are expected to add $13 trillion in value to the global economy in the coming decade. And yet, breaking out of “pilot purgatory” and bringing this revolutionary tech to scale is another story. |
Most companies are facing complete cultural change. That means embracing interdisciplinary collaboration, a diversity of perspectives, and data-driven decision making, as well as agility, experimentation, and adaptability. |
That’s a long list. Executives looking to manage a tech-enabled transformation should home in on six areas in particular, including creating ways of working that respond to customers’ rapidly changing needs. And one nonnegotiable for every organization: a digital base. Risk must be managed, too, according to three core principles: clarity, breadth, and nuance. One striking commonality among high-performing early adopters is that they recognize and are working to reduce the risks they face. AI adoption is a marathon, and the winners know this. |
On a positive note for employees nervous about job security, respondents at AI high performers report retraining much greater shares of employees (including training people experienced in business operations as analytics translators) in the past year because of AI, compared with respondents at other companies that have adopted AI. Respondents at high performers also predict that their companies will retrain larger shares of their workforce in the next three years. |
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PODCAST |
Are central bankers part of the problem? |
Sir Paul Tucker, the former deputy governor of the Bank of England, spoke with the McKinsey Global Institute recently about the 2008 financial crisis and its continuing fallout on interest rates and productivity. He also worries that central bankers have emerged from the crisis with enhanced powers that don’t reflect their unelected status. “All of us are absolutely committed to democracy—constitutional democracy, democracy with constraints. But we can’t have the biggest decisions taken by people that we didn’t elect, including central bankers,” he cautioned. “And I think it’s been too easy for the politicians to step back.” |
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MORE ON MCKINSEY.COM |
Premium mobility hits some bumps in the road | Several trends are reshaping the luxury-automotive market, including changing consumer attitudes and the rising influence of shared mobility. New research lays out steps that OEMs can take to craft a winning strategy. |
ESG: The essence of ‘long termism’ | Your business, like every business, is deeply intertwined with environmental, social, and governance (ESG) concerns. We list five key ways that a strong ESG proposition can create value. |
Shifting ground in real-estate investment management | As institutional investors flock to real estate, investment managers must avoid getting stuck in the middle of the market—too big to be nimble but too small to reach scale. |
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WHAT WE’RE READING |
Increased visibility for Invisible Women |
The winner of the 2019 FT and McKinsey Business Book of the Year Award is an investigation into how a gender gap in data perpetuates disadvantages for women across the world. |
Invisible Women: Data Bias in a World Designed for Men by Caroline Criado Perez, a journalist and activist, delves into the ways data collection systematically ignores half the world’s population. Criado Perez investigates the dangerous pattern that lurks in data—treating men as the default and women as atypical—and lays bare the consequences for women’s lives in terms of bias, time, money, and sometimes physical well-being. |
“Unassailable facts, backed by powerful stories, are what move minds,” Kevin Sneader, McKinsey’s global managing partner, told the audience at the awards in New York, on December 3. “This year’s winner brilliantly uses that combination to cast a bright light on one of the most important issues of our time.” |
Lionel Barber, editor of the FT, noted that “Invisible Women is a stunning book that tells people about sexism that is hidden in plain sight. The data that Criado Perez marshals are overwhelming, and her call for action is compelling.” |
This marked the 15th year of the FT and McKinsey Business Book of the Year Award, given annually to the book that provides “the most compelling and enjoyable insight into modern business issues.” Last year’s winner was Bad Blood: Secrets and Lies in a Silicon Valley Startup, John Carreyrou’s account of the rise and fall of Theranos, the blood-testing company. |
The Bracken Bower Prize for 2019’s best business-book proposal by an author under 35 was also awarded last Tuesday. The winner was Jonathan Hillman for The Sinolarity, which the award panel called “a thought-provoking and topical analysis of the battle between the US and China for control over tomorrow’s technology and networks.” |
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BACKTALK |
Have feedback or other ideas? We’d love to hear from you. |
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