RDP 2023-10: Adoption of Emerging Digital General-purpose Technologies: Determinants and Effects 3. Trends in Adoption

Figure 1 illustrates the proportion of firms referencing cloud computing, AI/ML, and either of these technologies over time. The share of firms first referencing cloud computing technology, which we take as an indicator of adoption, was steady over much of the 2010s. It then ticked up slightly in the late 2010s before spiking during COVID-19. This latter finding is consistent with reports of increased use of digital technologies during the COVID-19 pandemic (McMillan et al 2022). That said, the share of new adopters reverted quickly to the pre-COVID-19 level, suggesting that the COVID-19 pandemic represented a spike in adoption, not a change in the trend. This is notable given adoption is far from universal based on our metric, with only around 1/3 of firms having adopted these technologies.

Comparing our results to Bloom et al (2021) for the United States, the share of firms reporting cloud computing reached 10 per cent in 2020 (Figure B1), slightly above the 8 per cent observed for the United States. However, if we focus only on earnings calls, similar to Bloom et al, the level is around 5 per cent. Based on this more comparable metric, it appears that uptake of cloud computing in Australia was probably a bit below that in the United States pre-COVID-19.

Focusing on AI/ML, adoption was negligible until 2015 but then picked up before plateauing at around 3 per cent since 2018. There was no discernible surge in AI/ML adoption during the pandemic. The share of firms ever having referenced these technologies remains low, though this is likely to change with recent advancements in generative AI like ChatGPT.^[6]

The share of Australian listed firms reporting AI/ML in 2020 was around 6 per cent, compared to 8 per cent in the United States. Again, this suggests that the uptake in Australia seems to have been below that in the United States pre-COVID-19.

Trends have differed somewhat across industries (Figure 2). Unsurprisingly, the IT and communication sectors were early adopters of both technologies. The financial and health care sectors also appear to have been early adopters, particularly of AI/ML. But the sharp increase in adoption of cloud computing during COVID-19 was widespread.

Footnote

See, for example, The Economist (2023). That said, given AI is such a hot topic, differentiating between legitimate adoption and references may become more difficult going forward. As such, more complex approaches may be needed, for example, looking for nearby verbs indicating use (e.g. deploy) or using more suitable text analysis approaches such as large language models to identify context. [6]