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

Draca, Mirko, Nathan, Max, Nguyen-Tien, Viet ORCID: 0000-0002-7819-5069, Oliveira Cunha, Juliana, Rosso, Anna and Valero, Anna (2024) The new wave? The role of human capital and STEM skills in technology adoption in the UK. . University of Warwick.

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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 (Working Paper)
Official URL:	https://warwick.ac.uk/fac/soc/economics/research/c...
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:	14 Feb 2025 15:12
Last Modified:	14 Feb 2025 16:06
URI:	http://eprints.lse.ac.uk/id/eprint/127310

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