Firm-level technology adoption in times of crisis

Melanie Arntz, Michael J. Bohm, Georg Graetz, Terry Gregory, Florian Lehmer and Cacilia Lipowski

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: We investigate the diffusion of frontier technologies across German firms before and during the Covid-19 crisis. Our analysis tracks the nature, timing, and pandemic-related motivations behind technology investments, using tailor-made longitudinal survey data linked to administrative worker-firm records. Technologies adopted after the onset of the pandemic increasingly facilitated remote work and mitigated the negative employment effects of the crisis. Overall, however, investments in frontier technologies declined sharply, equivalent to a loss of 1.4 years of pre-pandemic investment activity. This procyclical adoption pattern is particularly striking since the pandemic created clear incentives to experiment with new technologies. Our findings highlight how short-run fluctuations may influence medium-run economic growth through their impact on technology diffusion.

Keywords: frontier technology investments; firm-level survey data; cyclicality of technology adoption; Covid-19 crisis (search for similar items in EconPapers)
Date: 2025-04-16
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