Research Discussion Paper – RDP 2023-10 Adoption of Emerging Digital General-purpose Technologies: Determinants and Effects

This paper examines the factors associated with the adoption of cloud computing and artificial intelligence/machine learning, two emerging digital general-purpose technologies (GPT), as well as firms' post-adoption outcomes. To do so we identify adoption of GPT based on references to these technologies in listed company reports, and merge this with data on their Board of Directors, their hiring activities and their financial performance. We find that firms that have directors with relevant technological backgrounds, or female representation on their Board, are more likely to profitably adopt GPT, with the former being particularly important. Worker skills also appear important, with firms that adopt GPT, particularly those that do so profitably, being more likely to hire skilled staff following adoption. Finally, while early adopters of GPT experience a dip in profitability following adoption, this is not evident for more recent adopters. This suggests that GPT may have become easier to adopt over time, potentially due to changes in the technologies or the availability of relevant skills, which is encouraging in terms of future productivity outcomes.