De-Routinization in the Fourth Industrial Revolution - Firm-Level Evidence

Abstract

This paper examines the extent to which aggregate-level de-routinization can be attributed to firm-level technology adoption during the most recent technological expansion. We use administrative data and a novel firm survey to distinguish frontier technologies from older technologies. We find that adopters of frontier technologies contribute substantially to deroutinization. However, this is driven only by a subset of these firms: large adopters replace routine jobs and less routine-intensive adopters experience faster growth. These scale and composition effects reflect firms' readiness to adopt and implement frontier technologies. Our results suggest that an acceleration of technology adoption would be associated with faster de-routinization and an increase in between-firm heterogeneity.

Keywords: technology, automation, tasks, capital-labor substitution, decomposition

JEL Classification: J21, J23, J24, O33