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Skills, not scale: GenAI and technology adoption

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  • Nuriye Melisa Bilgin
  • Gianmarco Ottaviano

Abstract

Do the determinants of technology adoption depend on technological architecture? Using administrative data on Turkish firms from 2021 to 2024, we compare the adoption of traditional and generative artificial intelligence (GenAI).We show that GenAI adoption is driven by workforce skill intensity and is not positively associated with firm size, whereas traditional AI depends on both scale and skills. Firms that adopt both technologies are distinct and represent the most persistent adoption mode. Conditional on adoption, the skill-to-size ratio governs technology choice, and transition dynamics indicate a sequential process in which firms adopt GenAI before expanding to hybrid use. Exploiting the release of ChatGPT as a quasi-experimental reduction in access costs, we find that high-skill firms differentially increased GenAI adoption, while firm size played a limited role. These results suggest that the canonical size-based diffusion pattern is not universal but depends on the cost structure of technologies, with implications for innovation policy and productivity dispersion.

Suggested Citation

  • Nuriye Melisa Bilgin & Gianmarco Ottaviano, 2026. "Skills, not scale: GenAI and technology adoption," CEP Discussion Papers dp2184, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:cepdps:dp2184
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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