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The new wave? The role of human capital and STEM skills in technology adoption in the UK

Author

Listed:
  • Mirko Draca
  • Max Nathan
  • Viet Nguyen-Tien
  • Juliana Oliveira-Cunha
  • Anna Rosso
  • Anna Valero

Abstract

Which types of human capital influence the adoption of advanced technologies? We study the skill biased adoption of information and communication technologies (ICT) across two waves in the UK. Specifically, we compare the 'new wave' of cloud and machine learning / AI technologies during the 2010s - pre-LLM - with the previous wave of personal computer adoption in the 1990s and early 2000s. At the area-level we see the emergence of a distinct STEM-biased adoption effect for the second wave of cloud and machine learning / AI technologies (ML/AI), alongside a general skill-biased effect. A one-standard deviation increase in the baseline share of STEM workers in areas is associated with around 0.3 of a standard deviation higher adoption of cloud and ML/AI. We find similar effects at the firm level where we are able to test for the influence of a wide range of skills. In turn, this STEM-biased adoption pattern has encouraged the concentration of these technologies, leading to more acute differences between high-tech and low-tech areas and firms. In contrast with classical technology diffusion, recent cloud and ML/AI adoption in the UK seems more likely to widen inequalities than reduce them.

Suggested Citation

  • Mirko Draca & Max Nathan & Viet Nguyen-Tien & Juliana Oliveira-Cunha & Anna Rosso & Anna Valero, 2024. "The new wave? The role of human capital and STEM skills in technology adoption in the UK," CEP Discussion Papers dp2040, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:cepdps:dp2040
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    Cited by:

    1. Luca Fontanelli & Flavio Calvino & Chiara Criscuolo & Lionel Nesta & Elena Verdolini, 2024. "The role of human capital for AI adoption: Evidence from French firms," Post-Print hal-05029748, HAL.
    2. Juliana Oliveira-Cunha & Bruno Serra-Lorenzo & Anna Valero, 2025. "Innovation through crises in the 2020s: survey evidence on digital, AI and net zero innovation in UK firms," CEP Reports 50, Centre for Economic Performance, LSE.

    More about this item

    Keywords

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    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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