Navigating the Dynamic Landscape of AI Skills in the Workforce

By Dr. Sampath LonkaReviewed by Susha Cheriyedath, M.Sc.Nov 22 2023

The advent of artificial intelligence (AI) has ushered in a transformative era for labor markets, with profound implications for the nature of work. In a recent publication in  AISeL, researchers explored the necessity of a dynamic skill-based measurement approach due to the evolving nature of both AI and its skills.

Background

In the past decade, the rapid evolution of AI has significantly reshaped the modern labor market, transcending routine task automation to disrupt nonroutine tasks and associated skill sets. Unlike previous technological advancements, contemporary AI prompts a global consensus that it profoundly impacts the workforce.

The World Economic Forum (WEF) projects that by 2025, half of the global workforce must upskill or reskill to meet digital automation and emerging AI technology demands. Despite this urgency, firms face challenges in allocating investments effectively due to insufficient information on shifting skills. Policymakers also grapple with formulating effective AI education policies.

Recognizing the dynamic nature of AI-related skills becomes imperative for the labor market. However, defining and measuring these skills pose challenges due to the evolving nature of AI. Existing approaches, such as taxonomy-based selection and keyword-based search, are static and lack a temporal dimension. Babina et al. propose a co-occurrence method, yet it too lacks a temporal perspective.

Addressing these measurement issues is crucial for a more accurate understanding of dynamic AI skills. The current study aims to elucidate the dynamic nature of AI skills, highlight the consequences of overlooking this dynamism in AI skill analysis, and propose a novel approach to capture skill dynamics.

Dynamic nature of AI skills

AI skills exhibit a dynamic nature characterized by three facets: amorphous, emergent, and evolving. The amorphous nature arises from blurred boundaries due to the diverse AI subfields and varying definitions. The emergent aspect highlights the frequent development of new skills, propelled by the rapid evolution of AI techniques and applications. This includes emerging tools such as Chat Generative Pre-Trained Transformer (ChatGPT) and introducing novel skills such as prompt engineering.

The evolving dimension signifies the transformation of existing skills, where proficiency in Python, once a general programming language, becomes highly valued in AI. As AI advances, skills may gain or lose relevance, shaping the dynamic landscape of AI capabilities. Understanding these dynamic dimensions is crucial for accurately identifying and representing AI skills, offering insights for researchers, businesses, and policymakers grappling with the evolving demands of the AI-driven labor market.

Existing studies on AI’s impact on firms and labor markets are categorized into two streams: those assessing labor market impact and those examining organizations' AI adoption or capability. Challenges in identifying AI skills, including Type I and II errors, underscore the need for a clear scope. The dynamic nature of AI skills, often overlooked, is crucial for a comprehensive understanding during rapid technological advancement.

Dynamic co-occurrence method

AI skills are typically identified through taxonomy-based selection, keyword-based search, and co-occurrence with "core" AI skills. Taxonomy and keyword methods yield binary representations, while co-occurrence provides a continuous scale. The conflict arises due to AI's dynamic nature conflicting with these static approaches, causing potential errors and overlooking emerging skills. The proposed dynamic co-occurrence method addresses these challenges, considering temporal dynamics by calculating AI-relatedness iteratively.

Unlike static methods, this approach captures AI skills' continuous and evolving nature, offering a more accurate representation over time. The flexibility of the co-occurrence method, transforming continuous into a binary representation, ensures nuanced understanding. This innovative approach mitigates conflicts by enhancing the precision of AI skill identification and accommodating the ever-evolving landscape of AI capabilities.

Empirical analysis

The evidence of AI skills' dynamic nature and the drawbacks of employing static identification methods are presented in the empirical study. Leveraging the Lightcast online job posting dataset from 2010 to 2021, covering over 300 million United States job openings, researchers reveal that highly AI-related skills, particularly those in the top 10 percent, are newer and have recently emerged.

The average AI-relatedness of all skills has consistently risen over the past decade, highlighting the evolving nature of these skills. Through a meticulous analysis of Type I and II errors, the inadequacy of static methods is demonstrated, with precision and recall metrics underscoring the shortcomings of taxonomy- and keyword-based approaches. The study further explores the ability of different methods to capture the emergence and evolution of new AI skills, emphasizing the superior performance of the dynamic co-occurrence method.

Additionally, the study delves into the implications of static methods for mapping AI skills to jobs, revealing an overestimation of AI jobs, especially in the distant past. The growth in demand for AI jobs is significantly underestimated by static methods compared to the dynamic co-occurrence method. This disparity in estimates holds crucial implications for comprehending the evolving nature of AI skills and their impact on the labor market.

Conclusion

In summary, researchers contributed valuable insights to the understanding of AI skills in labor markets by characterizing their dynamic nature. The proposed dynamic co-occurrence method emerges as a more accurate and nuanced approach, addressing the limitations of static methods and providing a foundation for future research, managerial decisions, and policy formulation in the rapidly changing landscape of AI in the workforce.