AI adoption and firm demand for workers and skills: New insights from Australia

Abstract

The latest Artificial Intelligence (AI) tools can perform some of the complex tasks that
highly skilled and well-paid workers perform. In this study, we analyse an Australian
dataset of firm job postings to explore the effects of AI adoption on demand for workers
and skills. Our findings suggest that AI adoption increases demand for new workers and
skills. Both the number of job postings and the number of skills required in job postings
grew slightly faster in AI adopting firms than in non-adopting firms, after controlling
for firm size, geography and industry. AI exposed occupations did not experience lower
demand than non-exposed occupations, unless they were employed in a non-adopting
firm. It is not clear whether the stronger demand for new workers in AI adopting firms
is due to the need to replace existing workers with new workers (with new skills) or due
to growth in the total number of workers. However, our findings counter fears about AI
substituting for or deskilling workers and align with the view that the latest AI tools serve
to augment, rather than substitute for, human capability.