McKinsey State of AI 2022 highlights stubborn adoption plateau

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

According to the report, AI adoption and investment have accelerated in the last five years, with businesses reporting AI becoming a bigger 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 for the past few years.

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

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Wide variety of AI capabilities and use cases

That said, among those who are adopting AI, many have increased the breadth of their capabilities. The results show these leaders making larger investments in AI, engaging in increasingly advanced practices known to enable scale and faster AI development, and showing signs of faring better in 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, which are really stretching their competitive envelope, and everyone else who needs to catch up,” said Chui.

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

The most commonly adopted use cases, the McKinsey report found, are in services optimization, creation of new AI-based products, customer service analytics and customer segmentation.

McKinsey State of AI Report 2022

Organizations should consider AI risks

One concerning result from McKinsey’s State of AI 2022 report is the lack of progress in organizations’ reported mitigation of AI-related risks, such as bias, explainability or safety.

“If you were to ask me five years ago, I would have imagined we’d see more and more recognition of these risks and therefore more and more companies taking action to manage or mitigate them,” said Chui. “The levels have not increased as much as I would have expected.”

But, he added, AI high performers tend to be further along in their journeys to understanding and managing these risks.

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

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McKinsey State of AI Report 2022

Potential for AI is in driving 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 shifted from experimenting with AI to actively embedding it in enterprise applications.”

“We do find these high performers who are driving lots of bottom-line impact using these technologies,” said Chui, But he pointed out that it’s really about looking at the broad set of things necessary besides simply buying a piece of software or some sort of cloud service in order for you to move your organization forward.

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

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

Originally appeared on: TheSpuzz