How Firms will affect the Future of Work

In the current debate over the Future of Work, there is little discussion about how firms anticipate the evolution of their demand for labor and the related mix of skills as they adopt Artificial Intelligence (AI) tools. This article contributes to this debate by leveraging a global survey of 3000 firms in 10 countries, covering the main sectors of the economy. Descriptive statistics from the survey are complemented by econometric analyses of corporate labor demand decisions. The findings are four-fold. First, those are still early days in the absorption of AI technologies, with less than 10% of companies investing in a majority of AI technologies and for multiple purposes. Second, if an aggregate portion of firms anticipates reducing employment as a result of adopting AI technologies, as many other companies anticipate labor growth or reorganizing employment. Third, this reallocation picture holds true when we examine further demand by labor functions and skills, with talent shifting toward more analytic, creative, and interaction skills, and away from administrative and routine-based functions, in line with past trends of skill- and routine-biased technological change. Fourth, a novel to the literature on Future of Work, econometric results on employment change highlight that employment dynamics are driven by related spillover effects to product markets. Higher competition, larger expectations of market (share) deployment may counterbalance negative automation effect on employment dynamics.