📝 usncan Note: Here’s What To Do About It
Disclaimer: This content has been prepared based on currently trending topics to increase your awareness.
At first glance, the future of tech looks limitless: just think how fast artificial intelligence (AI), including generative and agentic AI, is advancing. Already, 80 percent of companies are using AI in at least one business function and more than 90 percent are planning to increase their AI investments.
But as business leaders know, past performance does not guarantee future results. In McKinsey’s Annual Tech Trends outlook, my McKinsey colleagues Lareina Yee, Michael Chui, Roger Roberts and Sven Smit identified 13 “frontier technologies” that matter most to companies in 2025. They not only include gen AI and robotics, but fields like advanced connectivity (for example 5G and emerging 6G cellular systems), bioengineering, space, cloud and edge computing, immersive reality, and mobility (autonomous and electric vehicles, drones, electric vertical takeoff and landing aircraft; e-scooters, and e-bikes).
Underlying the development of each of these 13 frontier technologies is the most critical constraint: talent. In AI, 46% of leaders cite skill gaps as a major barrier to adoption, and job postings for agentic AI rose almost 1000% from 2023-24. In skills related to data science, algorithms, the Internet of Things, 5G, artificial intelligence, DevOps, virtual reality, and quantum computing, for example, McKinsey has documented that the availability of many skills is running far short of demand for them.
Consider what is happening in energy and sustainability, another of the frontier technologies, and the one that is seeing the greatest equity investment—$223 billion in 2024. Much of the investment is focused on the generation and use of low-carbon electricity and fuels–technologies that are particularly important given how data centers are driving up electricity demand.
For the transition toward clean energy to advance, so must digitization, to enable data analysis, automation, and AI-enabled grid optimization. For example, AI and data analytics can be used to integrate large data sets to better identify deposits of minerals used in electric vehicles. Automation and other technical skills, including Python, are critical to integrate AI technologies into energy systems.
There are significant talent shortages in all these areas and also in sector-specific ones such as clean energy and waste management. Unless these are filled, the inevitable consequence will be a slower energy transition and thus a regression in global efforts to deal with climate change.
The same pattern applies to each of the 13 frontier technologies: great potential, amazing technical progress, blossoming enthusiasm—and not nearly enough of the trained human talent essential to turn promise into reality.
But talent gaps are not necessarily perpetual. They can be filled or at least narrowed. Here are three approaches for business leaders to consider.
Invest in reskilling
Given the realities of tight labor markets and aging populations, a significant part of the answer to talent shortages will be to train current employees. Some of the capabilities required are specific, and targeted training is appropriate. A German solar-energy company, for example, launched a Heat Pump Academy to train installers and specialists in that technology. Many other skills, however, are broad-based, so it is important to build cross-functional programs that can make workers future-ready. For their part, employees need to be lifelong learners and continue to build new skills. Initiatives that have been proven to work include designing tailored learning journeys and starting “skills hubs” with metrics that track results.
Create new talent models
Many frontier technologies, particularly those related to AI and data, are not place-based. Creating such globally distributed teams is one way to find the talent needed. The use of AI itself can augment the workforce, releasing people from dull, repetitive tasks to take on more demanding and engaging roles; chatbots that answer routine questions, for example, mean call center staff can take care of more complicated questions. Employers who recruit for skills rather than credentials, may be able to tap into a high-potential pool of talent. For frontier technologies such as energy and sustainability solutions as well as cloud and edge computing, growth will also require skilled trade roles such as construction workers and electricians.
See talent as an element of strategy
Big tech bets in frontier technologies won’t deliver returns unless companies plan their hiring and training at the same pace as their product and infrastructure investments. That means align the hiring roadmap directly to the product roadmap, with a disproportionate focus on the roles that will drive the greatest value.
Given how essential talent is, it cannot be the sole responsibility of the human resources division; it has to be a corporate priority, starting with the C-suite. Among companies that have begun a large-scale, programmatic skills transformation, the vast majority say it has helped them to realize their strategy, as well as make their employees more satisfied.
We do not know how the future will unfold. But however it does, we can be sure that progress will depend heavily on talent– the skill, intellect, and creativity of people. In the 13 frontier sectors, the state of the technology is readier than the workforce. Organizations that can assemble adaptable, interdisciplinary, inspired teams, will position themselves to narrow that gap and take full advantage of the possibilities of technological innovation.
