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

Mirko Draca, Max Nathan, Viet Nguyen-Tien Nguyen, Juliana Oliveira Cunha, Anna Rosso and Anna Valero Sivropoulos-Valero

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

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.

Keywords: technology diffusion; ICT; human capital; stem; technological change; AI (search for similar items in EconPapers)
JEL-codes: J24 O33 R11 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2024-10-10
New Economics Papers: this item is included in nep-ict and nep-tid
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