RDP 2023-10: Adoption of Emerging Digital General-purpose Technologies: Determinants and Effects 7. Conclusion

Against the background of slowing productivity growth and technology diffusion, it is crucial to better understand the drivers and barriers to the adoption of emerging digital general-purpose technologies, and their impact on firm outcomes. This paper leverages a unique dataset derived from annual reports and earnings calls to examine the adoption of cloud computing and AI/ML in Australia.

Overall, our findings provide a mixed view of the prospects for future adoption and productivity growth. While we do find that the pandemic led to an unprecedented surge in GPT adoption, rates of adoption reverted quickly to the pre-pandemic trend. As such, the pandemic seems to have been associated with a level shift in adoption, not an ongoing increase in the speed of adoption. That said, we do find evidence that it has become easier to profitably adopt GPT, which could support productivity growth going forward, particularly if firms are encouraged to invest and improve through strong competition.

We also find evidence of the importance of director and worker skills in adoption. Having gender-diverse boards with a strong technical background is associated with a greater chance of profitable GPT adoption. And there is a strong association between adoption and hiring of skilled workers, suggesting firms require skilled workers to adopt these GPT. These findings highlight the importance of building a skilled and dynamic labour force in Australia to facilitate adoption of GPT and support productivity growth.