McKinsey's Top Technology Trends for Electronics in 2025
London, Tuesday, 22 July 2025.
McKinsey’s report highlights transformative tech trends for 2025, focusing on AI, IoT, and talent acquisition. Frontier technologies, like Agentic AI, are poised to shape the electronics industry’s future.
The Role of Artificial Intelligence
Artificial Intelligence (AI) continues to be a cornerstone of technological advancements in 2025, revolutionizing various industries, including electronics. McKinsey’s report identifies ‘Agentic AI’ as a leading trend, which involves AI systems capable of interacting autonomously with their environment. This development is expected to enhance operational efficiencies and foster innovation, making AI a vital component of the electronics sector’s future strategy [1][2].
Internet of Things and Connectivity
The Internet of Things (IoT) is experiencing explosive growth, with the number of connected devices projected to rise significantly by the end of the year. McKinsey highlights how IoT connectivity is transforming electronics by enabling smarter devices and integrated systems. Companies that effectively leverage IoT stand to gain a competitive edge through enhanced product offerings and improved customer experiences [1][3]. In 2025, approximately 30 billion IoT devices are expected to be in use, a substantial increase from 16.6 billion devices in 2023 [2].
Talent Acquisition and Human Resources
As the demand for technology skills surges, talent acquisition strategies are evolving. According to a joint report from Microsoft and LinkedIn, 71% of business leaders would prefer to hire less experienced candidates with generative AI skills over more seasoned professionals without such expertise [4]. This trend underscores the need for companies in the electronics industry to prioritize skill development and adapt their recruitment processes to attract top talent in a rapidly changing tech landscape [1][4].
Implications for the European Electronics Sector
European companies must remain agile to capitalize on these emerging technology trends. The region’s electronic businesses are urged to invest in AI and IoT infrastructure to maintain competitiveness. McKinsey advises executives to focus on domain-specific applications of these technologies while considering regulatory impacts and ecosystem readiness [1][5]. As Malcolm Penn cautions, Europe must navigate these innovations carefully to not only meet internal benchmarks but also compete globally [5].