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The role of human-capital in artificial intelligence adoption

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  • Brey, Björn
  • van der Marel, Erik

Abstract

We study the role of human-capital on the early adoption and diffusion of Artificial Intelligence (AI) technologies. We do this using recently released EUROSTAT data on AI-adoption across European countries and industries in 2021. We find that pre-existing differences in human-capital are a key driver of differences in AI-adoption. Our estimates suggest that one-third-to half of AI-adoption is linked to differences in available human-capital across country-industry cells. This relationship holds even when we account for country and industry specific factors. Moreover, higher clustering of university educated workers in firms appears crucial for AI-adoption. This effect is particularly strong for the following AI technologies: (i) those assisting the automation of processes and (ii) those that enable physical movements of machinery. Within firms, human-capital fosters the use of AI in processes associated with production, management and logistics. Despite documenting the automative nature of the AI technologies adopted, we find no evidence for them leading to employment declines (at least by 2021).

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  • Brey, Björn & van der Marel, Erik, 2024. "The role of human-capital in artificial intelligence adoption," Economics Letters, Elsevier, vol. 244(C).
    • Handle: RePEc:eee:ecolet:v:244:y:2024:i:c:s0165176524004336
    DOI: 10.1016/j.econlet.2024.111949
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    References listed on IDEAS

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    1. Fontanelli, Luca & Calvino, Flavio & Criscuolo, Chiara & Nesta, Lionel & Verdolini, Elena, 2024. "The role of human capital for AI adoption: evidence from French firms," LSE Research Online Documents on Economics 126787, London School of Economics and Political Science, LSE Library.

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    More about this item

    Keywords

    Artificial intelligence; Human-capital; Technological change;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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