McKinsey State of AI 2022 highlights stubborn adoption plateau

Consulting firm McKinsey released its State of AI 2022 report today, revealing key findings about the use and adoption of AI globally over the past half decade.

According to the report, AI adoption and investment has accelerated over the past five years, with companies reporting AI has become a greater priority. AI adoption has more than doubled since 2017 (20% to 50%), with 63% of businesses expecting investment in AI to increase over the next three years.

However, there has been a noticeable plateau, with the proportion of organizations adopting AI hovering between 50 and 60 percent in recent years.

“One of the things that surprised me was the plateau in adoption,” McKinsey partner Michael Chui told VentureBeat. “We see the potential for this technology to create business value in virtually every industry and every function, and you’d think its use would continue to grow.

Wide range of AI features and use cases

That said, among those adopting AI, many have increased the breadth of their capabilities. The results show that these leaders are making larger investments in AI, engaging in increasingly advanced practices known to enable scale and faster AI development, and showing signs of outperforming the tight market for AI talent. Respondents at AI high performers are also nearly eight times more likely than their peers to say their organizations spend at least 20 percent of their digital technology budgets on AI-related technologies.

“We continue to see this divergence between those companies that we’ve described as AI high performers, who are really stretching their competitive edge, and everyone else who needs to catch up,” Chui said.

The problem is that there is no one “unlocking” when it comes to generating AI value in the enterprise, Chui explained. “It’s not like if you just automate data pipelines, value comes in,” he said. “In many cases these won’t be technology solutions, but ‘people’ things, whether it’s having the right strategy aligned with your AI strategy, or getting the organization and the people within it to act differently based on insights.”

The most common use cases, the McKinsey report found, are service optimization, creation of new AI-based products, customer service analysis and customer segmentation.

Organizations should assess AI risks

A worrying finding from McKinsey’s State of AI 2022 report is the lack of progress in organizations’ reported reduction of AI-related risks, such as bias, explanatory power or security.

“If you would have asked me five years ago, I would have imagined that we would see more and more recognition of these risks and therefore more and more companies taking steps to manage or reduce them,” Chui said. “The levels haven’t increased as much as I would have expected.”

But, he added, AI practitioners tend to be further along in understanding and managing these risks.

“It might just have to do with maturity,” he said. “There is also more history when it comes to managing risk in cyber security, for example.”

The potential for AI lies in creating value for the business

The hottest roles for AI talent in 2022 were software engineers, data engineers and data scientists, the McKinsey report found, another “clear sign that many organizations have largely moved from experimenting with AI to actively building it into enterprise applications.”

“We’re finding these high performers that create a lot of impact on the bottom line using these technologies,” Chui said, but he pointed out that it’s really about looking at the broad set of things that are necessary beyond buying a piece of software or something kind of cloud service to enable you to move your organization forward.

“The potential for AI lies in the things that drive value in business,” he said. “For some businesses, it’s operational excellence. In some other businesses, it’s your customer intimacy.”

Today’s high-performing companies, he added, do. “They are applying their AI efforts in the places that will create the most value,” he said.