Artificial intelligence is reshaping how companies operate, but it may not translate into more job creation, according to new research.
That’s a major takeaway from a recently published study co-authored by Northeastern University economics and public policy professor Shantanu Khanna.
In the report, researchers examined the long-term results of a government-backed subsidy program in Sweden that provided funding to small- and medium-sized businesses investing in AI for the first time.
One of the study’s biggest findings is that although the government funding resulted in firms posting more job advertisements, it did not translate into the creation of more jobs, Khanna explained.
The program was created by Vinnova, the country’s innovation agency, and awarded funding to Swedish businesses from 2019 to 2020.
The companies were creative, broad and varied in their project summaries to the Swedish government—from creating image recognition software for plant cultivation to developing online shopping recommendation algorithms to reducing the rate of product returns.
To take a long-term assessment of the program’s impact, the researchers cross-referenced data from the program—which included descriptions of projects, awarded amounts of funding, and start and end dates—with Swedish government business registries to better understand how these projects impacted employee retention, hiring and separations.
The researchers then compared the differences in labor demands between the firms that received funding and the ones that applied but did not receive funding over a five-year period.
“What we found was that five years post award, the firms that were ‘treated,” which means firms that got the AI subsidies, were 24 percentage points more likely to post a job vacancy relative to firms that were not awarded,” Khanna said.
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