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The New Wave? The Role of Human Capital and STEM Skills in Technology Adoption in the UK

Author

Listed:
  • Draca, Mirko

    (CEP, London School of Economics ; Warwick University and CAGE Research Centre)

  • Nathan, Max

    (CEP, London School of Economics ; Warwick University and CAGE Research Centre ; University College London)

  • Nguyen-Tien, Viet

    (CEP, London School of Economics ; POID, London School of Economics)

  • Oliveira-Cunha, Juliana

    (CEP, London School of Economics ; IGC, London School of Economics)

  • Rosso, Anna

    (CEP, London School of Economics ; University of Insubria)

  • Valero, Anna

    (CEP, London School of Economics ; POID, London School of Economics)

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

  • Draca, Mirko & Nathan, Max & Nguyen-Tien, Viet & Oliveira-Cunha, Juliana & Rosso, Anna & Valero, Anna, 2024. "The New Wave? The Role of Human Capital and STEM Skills in Technology Adoption in the UK," The Warwick Economics Research Paper Series (TWERPS) 1521, University of Warwick, Department of Economics.
    • Handle: RePEc:wrk:warwec:1521
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    References listed on IDEAS

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    More about this item

    Keywords

    Technology Diffusion ; ICT ; Human Capital ; STEM JEL Codes: D22 ; J24 ; O33 ; R11;
    All these keywords.

    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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