AI Boosts Productivity and Wages in Tech Sectors, PwC Study Reveals

AI Drives Productivity and Wage Growth in Tech Sectors

A recent study by PwC, analyzing nearly one billion job ads worldwide between 2018 and 2024, has revealed that industries heavily exposed to artificial intelligence (AI) are experiencing significant productivity and wage growth. The Global AI Jobs Barometer highlights the transformative impact of AI on various sectors, particularly in software, finance, and professional services 1

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Productivity Surge in AI-Exposed Industries

The research indicates that AI-exposed industries have seen more than three times higher growth in revenue generated per employee compared to other sectors. This productivity boost became particularly evident with the emergence of Large Language Models (LLMs), with revenue per employee growth jumping from 7% annually between 2018 and 2022 to an impressive 27% between 2018 and 2024 1

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In contrast, industries less affected by AI, such as mining and hospitality, experienced a slight decline in productivity growth. This disparity underscores the potential of AI to significantly enhance business efficiency and output in certain sectors 1

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Wage Premium for AI Skills

The increased productivity in AI-exposed industries has translated into higher wages for employees with AI expertise. Jobs requiring AI skills carried an 11% salary premium in 2024 compared to those that did not 1

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. In Ireland, the wage premium for AI-skilled workers was even more pronounced, reaching 56% on average last year - a substantial increase from 25% the previous year 2

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Job Growth and AI Exposure

Interestingly, while AI-exposed industries are seeing productivity gains, job openings in these sectors have been growing at a slower pace compared to others. Between 2019 and 2024, occupations exposed to AI saw growth in vacancies of 12%, compared with 50% for less exposed occupations 1

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. However, in Ireland, job numbers in AI-exposed occupations have grown by nearly 94% since 2019, indicating regional variations in AI adoption and its impact on employment 2

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Industry Perspectives and Recommendations

Umang Paw, Chief Technology Officer at PwC UK, emphasized the potential of AI to provide "stardust" to those ready to adapt but warned of the risk of leaving others behind. He called for a concerted effort to expand access to technology and training to ensure the benefits of AI are widely shared 1

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PwC recommends that businesses view AI as a tool for enterprise-wide transformation and treat it as a growth strategy rather than just an efficiency measure. The firm also stresses the importance of frequent reskilling and upskilling for workers to keep pace with AI advancements 2

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Challenges and Future Outlook

Despite the positive trends, the full potential of AI remains uncertain. The gap in job vacancy growth between AI-exposed and less exposed sectors has expanded over time, particularly since the advent of Generative AI in 2022 1

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. This highlights the need for careful consideration of AI's long-term impact on employment across different industries.

As AI continues to reshape the business landscape, it's clear that its influence on productivity, wages, and job roles will be profound. The challenge for businesses and policymakers alike will be to harness the benefits of AI while ensuring that its advantages are equitably distributed across the workforce and society at large.