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

Author

Listed:
  • Carioli, Paolo

    (KU Leuven, Dept. of Management, Strategy and Innovation)

  • Czarnitzki, Dirk

    (KU Leuven, Dept. of Management, Strategy and Innovation; Center for R&D Monitoring (ECOOM) at KU Leuven, and Leibniz Centre for European Economic Research (ZEW), Mannheim)

  • Fernández, Gastón P.

    (Luxembourg Institute of Socio-Economic Research (LISER))

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 shortage on academic qualifications and STEM skills relates to firms adopting AI.

Suggested Citation

  • Carioli, Paolo & Czarnitzki, Dirk & Fernández, Gastón P., 2026. "Evidence on the Adoption of Artificial Intelligence: The Role of Skills Shortage," IZA Discussion Papers 18793, IZA Network @ LISER.
    • Handle: RePEc:iza:izadps:dp18793
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    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • 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

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