The Tech Effect

The AI revolution is reshaping who gets hired, who gets promoted, and which skills may become obsolete. While AI’s full impact on the workforce remains to be seen, new research examining companies’ nascent efforts to adopt artificial intelligence technologies may offer some clues. 

Between 2010 and 2018, as AI was transitioning from research to commercial use, early adopting firms in the U.S. significantly reshaped workforces, prioritizing STEM degrees and flattening out management structures. 

Those findings are part of a paper, co-authored by Assistant Professor Anastassia Fedyk, that provides the first comprehensive look across individual firms measuring their early investment in AI. 

Fedyk and her colleagues analyzed data from hundreds of millions of résumés then paired this information with 180 million U.S. job postings. Using prior work by Fedyk, the researchers found that total employment went up overall due to AI investment: As companies began to innovate more, they created a greater need for new employees. 

They also found that the composition of the workforce changed. First, the number of employees with college education or beyond increased, while those with no college education declined—and not only because of new AI hires. These companies also saw a general shift toward hiring workers with a degree in STEM fields and a reduction in new hires with social science degrees.

Finally, Fedyk’s team found that AI-related hires made firms less top-heavy, meaning fewer roles in middle management and above. 

Further research revealed how firms’ investments in AI made them earn especially high returns in market upswings but lose value during downturns. The researchers also found that these firms became more correlated with other growth firms and less correlated with value firms, consistent with AI increasing innovation and creating growth options.

So far, some of these early effects seem to be strengthened by the new wave of AI: Big players with vast amounts of data and computing resources are poised to benefit most. Fedyk says this phenomenon may be an early warning, as concerns about increased concentration and market power have grown.