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Evidence on the Adoption of Artificial Intelligence: The Role of Skills Shortage

Author

Listed:
  • Paolo Carioli
  • Dirk Czarnitzki
  • Gastón P Fernández Barros

Abstract

Artificial Intelligence (AI) is considered to be the next general-purpose technology, with the potential of performing tasks commonly requiring human capabilities. While it is commonly feared that AI replaces labor and disrupts jobs, we instead investigate the potential of AI for overcoming increasingly alarming skills shortages in firms. We exploit unique German survey data from the Mannheim Innovation Panel on both the adoption of AI and the extent to which firms experience scarcity of skills. We measure skills shortage by the number of job vacancies that could not be filled as planned by firms, distinguishing among different types of skills. To account for the potential endogeneity of skills shortage, we also implement instrumental variable estimators. Overall, we find a positive and significant effect of skills shortage on AI adoption, the breadth of AI methods, and the breadth of areas of application of AI. In addition, we find evidence that scarcity of labor with academic education relates to firms exploring and adopting AI.

Suggested Citation

  • Paolo Carioli & Dirk Czarnitzki & Gastón P Fernández Barros, 2024. "Evidence on the Adoption of Artificial Intelligence: The Role of Skills Shortage," Working Papers of ECOOM - Centre for Research and Development Monitoring 735893, KU Leuven, Faculty of Economics and Business (FEB), ECOOM - Centre for Research and Development Monitoring.
    • Handle: RePEc:ete:ecoomp:735893
    Note: paper number MSI_2402
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    Keywords

    Artificial Intelligence; CIS data; skills shortage;
    All these keywords.

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