Degrees of Change

Chapter 18AI Skills Wanted: How AI Technologies Create Demand for Skilled Workers

—Fabian Stephany and Ole Teutloff (Oxford Internet Institute, University of Oxford)

History has shown that major technological innovations reshaped the skill composition of occupations. Artificial intelligence (AI) is driving a similar transformation today. We synthesize findings from four of our recent research papers, combining empirical evidence from online vacancy data, online freelancing markets, and employer surveys.

We begin by showing, through examples of the automobile and computer revolutions, how general-purpose technologies have historically redefined existing jobs and created entirely new ones. Automobiles redefined existing roles, such as taxi drivers, while generating new industries from road construction to car manufacturing; similarly, computers created sectors such as software development and transformed creative fields like photography, shifting required skills from analog darkroom techniques to digital editing.

The chapter then turns to AI as a contemporary general-purpose technology. Using international job-posting data, we document the rapid and broad-based rise in demand for AI skills—both technical (e.g., model development, data engineering) and AI literacy (e.g., prompt design, risk management). This demand outpaces supply, creating a skills gap that elevates the market value of AI competencies. Our research shows that AI skills command a substantial wage premium—often ...