IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp18793.html

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
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp18793.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Daron Acemoglu & Pascual Restrepo, 2018. "The Race between Man and Machine: Implications of Technology for Growth, Factor Shares, and Employment," American Economic Review, American Economic Association, vol. 108(6), pages 1488-1542, June.
    2. Daron Acemoglu, 2025. "The simple macroeconomics of AI," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 40(121), pages 13-58.
    3. Rammer, Christian & Fernández, Gastón P. & Czarnitzki, Dirk, 2022. "Artificial intelligence and industrial innovation: Evidence from German firm-level data," Research Policy, Elsevier, vol. 51(7).
    4. Daron Acemoglu & Fredric Kong & Pascual Restrepo, 2024. "Tasks At Work: Comparative Advantage, Technology and Labor Demand," NBER Working Papers 32872, National Bureau of Economic Research, Inc.
    5. Igna, Ioana & Venturini, Francesco, 2023. "The determinants of AI innovation across European firms," Research Policy, Elsevier, vol. 52(2).
    6. Daron Acemoglu & Pascual Restrepo, 2019. "Automation and New Tasks: How Technology Displaces and Reinstates Labor," Journal of Economic Perspectives, American Economic Association, vol. 33(2), pages 3-30, Spring.
    7. Erik Brynjolfsson & Danielle Li & Lindsey Raymond, 2025. "Generative AI at Work," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 140(2), pages 889-942.
    8. Jens Horbach & Christian Rammer, 2022. "Skills shortage and innovation," Industry and Innovation, Taylor & Francis Journals, vol. 29(6), pages 734-759, July.
    9. Daron Acemoglu, 2010. "When Does Labor Scarcity Encourage Innovation?," Journal of Political Economy, University of Chicago Press, vol. 118(6), pages 1037-1078.
    10. Eli Bekman & John Bound & Stephen Machin, 1998. "Implications of Skill-Biased Technological Change: International Evidence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(4), pages 1245-1279.
    11. Flavio Calvino & Luca Fontanelli, 2025. "Decoding AI: Nine facts about how firms use artificial intelligence in France," LEM Papers Series 2025/13, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    12. Czarnitzki, Dirk & Fernández, Gastón P. & Rammer, Christian, 2023. "Artificial intelligence and firm-level productivity," Journal of Economic Behavior & Organization, Elsevier, vol. 211(C), pages 188-205.
    13. Kristina McElheran & J. Frank Li & Erik Brynjolfsson & Zachary Kroff & Emin Dinlersoz & Lucia Foster & Nikolas Zolas, 2024. "AI adoption in America: Who, what, and where," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 33(2), pages 375-415, March.
    14. Babina, Tania & Fedyk, Anastassia & He, Alex & Hodson, James, 2024. "Artificial intelligence, firm growth, and product innovation," Journal of Financial Economics, Elsevier, vol. 151(C).
    15. Otto Toivanen & Lotta Väänänen, 2016. "Education and Invention," The Review of Economics and Statistics, MIT Press, vol. 98(2), pages 382-396, May.
    16. Kenneth J. Arrow & William M. Capron, 1959. "Dynamic Shortages and Price Rises: The Engineer-Scientist Case," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 73(2), pages 292-308.
    17. Stefano Baruffaldi & Brigitte van Beuzekom & Hélène Dernis & Dietmar Harhoff & Nandan Rao & David Rosenfeld & Mariagrazia Squicciarini, 2020. "Identifying and measuring developments in artificial intelligence: Making the impossible possible," OECD Science, Technology and Industry Working Papers 2020/05, OECD Publishing.
    18. Alex Coad & Gabriele Pellegrino & Maria Savona, 2016. "Barriers to innovation and firm productivity," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 25(3), pages 321-334, April.
    19. Sousa, Maria José & Rocha, Álvaro, 2019. "Skills for disruptive digital business," Journal of Business Research, Elsevier, vol. 94(C), pages 257-263.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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.
    2. Flavio Calvino & Luca Fontanelli, 2026. "Decoding AI: an early look at how French firms use AI," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 16(1), pages 51-93, March.
    3. Minniti, Antonio & Prettner, Klaus & Venturini, Francesco, 2025. "AI innovation and the labor share in European regions," European Economic Review, Elsevier, vol. 177(C).
    4. Andres, Raphaela & Niebel, Thomas & Sack, Robin, 2025. "Big data and firm-level productivity – A cross-country comparison," Information Economics and Policy, Elsevier, vol. 71(C).
    5. Park, Gangmin & Kang, Songhee & Yi, Sangyoon & Kim, Junyoun, 2026. "Diverse impacts of AI investments on productivity gains: Effects of industry and innovation characteristics," Technological Forecasting and Social Change, Elsevier, vol. 224(C).
    6. Sébastien Houde & Wenjun Wang, 2026. "AI Adoption and Carbon Intensity: Evidence from China," CESifo Working Paper Series 12803, CESifo.
    7. Prashant Garg & Tommaso Crosta & Jasmin Baier, 2026. "Global Automation Atlas," Papers 2605.17086, arXiv.org, revised Jul 2026.
    8. Gao, Jie & Li, Zhizhuo & Nguyen, Thithuha & Zhang, Wentao, 2025. "Digital transformation and enterprise employment," International Review of Economics & Finance, Elsevier, vol. 99(C).
    9. Pastor-Merino, Ana & Martínez-Barbero, Xavier & Vicente, María R. & Domenech, Josep, 2026. "Does AI boost firm productivity? A web scraping and LLMs approach," Telecommunications Policy, Elsevier, vol. 50(2).
    10. Carlo Drago & Alberto Costantiello & Marco Savorgnan & Angelo Leogrande, 2025. "Macroeconomic and Labor Market Drivers of AI Adoption in Europe: A Machine Learning and Panel Data Approach," Economies, MDPI, vol. 13(8), pages 1-62, August.
    11. Zhou, Yuwen & Shi, Xin, 2025. "How does digital technology adoption affect corporate employment? Evidence from China," Economic Modelling, Elsevier, vol. 147(C).
    12. Anastasios Evgenidis & Apostolos Fasianos, 2025. "AI news shocks and the macroeconomy: evidence from UK patent data," IFS Working Papers W25/48, Institute for Fiscal Studies.
    13. Standaert, Thomas & Andries, Petra, 2026. "Overcoming difficulties in knowledge transfer: Harnessing the power of AI to drive process innovation," Technovation, Elsevier, vol. 149(C).
    14. Carlo Drago & Alberto Costantiello & Marco Savorgnan & Angelo Leogrande, 2025. "Driving AI Adoption in the EU: A Quantitative Analysis of Macroeconomic Influences," Working Papers hal-05102974, HAL.
    15. Frank M. Fossen & Trevor McLemore & Alina Sorgner, 2024. "Artificial Intelligence and Entrepreneurship," Foundations and Trends(R) in Entrepreneurship, now publishers, vol. 20(8), pages 781-904, December.
    16. Fontanelli, Luca & Guerini, Mattia & Miniaci, Raffaele & Secchi, Angelo, 2025. "Predictive AI and productivity growth dynamics: Evidence from French firms," Journal of Economic Behavior & Organization, Elsevier, vol. 240(C).
    17. Hennessy, David A., 2025. "Information as a catalyst for industrialization," Journal of Economic Behavior & Organization, Elsevier, vol. 230(C).
    18. Simone Vannuccini, 2025. "Move fast and integrate things: The making of a European Industrial Policy for Artificial Intelligence," MIOIR Working Paper Series 2025-02, The Manchester Institute of Innovation Research (MIoIR), The University of Manchester.
    19. Nikolaos Charalampidis, 2024. "Frictions and the diffusion of automation," Manchester School, University of Manchester, vol. 92(2), pages 148-170, March.
    20. Wang, Ping & Wong, Tsz-Nga, 2026. "Artificial intelligence and technological unemployment," Journal of Monetary Economics, Elsevier, vol. 158(C).

    More about this item

    Keywords

    ;
    ;
    ;

    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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp18793. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Mark Fallak (email available below). General contact details of provider: https://edirc.repec.org/data/izaaalu.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.