The new wave? The role of human capital and STEM skills in technology adoption in the UK

Draca, Mirko, Nathan, Max, Nguyen, Viet Nguyen-Tien ORCID: 0000-0002-7819-5069, Oliveira Cunha, Juliana, Rosso, Anna and Sivropoulos-Valero, Anna Valero (2024) The new wave? The role of human capital and STEM skills in technology adoption in the UK. CEP Discussion Papers (CEPDP2040). London School of Economics and Political Science. Centre for Economic Performance, London, UK.

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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.

Item Type:	Monograph (Discussion Paper)
Official URL:	https://cep.lse.ac.uk/_new/publications/discussion...
Additional Information:	© 2024 The Author(s)
Divisions:	Centre for Economic Performance Economics
Subjects:	H Social Sciences > HC Economic History and Conditions
JEL classification:	J - Labor and Demographic Economics > J2 - Time Allocation, Work Behavior, and Employment Determination and Creation; Human Capital; Retirement > J24 - Human Capital; Skills; Occupational Choice; Labor Productivity O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development > O33 - Technological Change: Choices and Consequences; Diffusion Processes R - Urban, Rural, and Regional Economics > R1 - General Regional Economics > R11 - Regional Economic Activity: Growth, Development, and Changes
Date Deposited:	13 Feb 2025 14:42
Last Modified:	14 Feb 2025 15:21
URI:	http://eprints.lse.ac.uk/id/eprint/126769

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