Technological revolutions must be matched by policies

Philippe Aghion (College of France, LSE, and CEPR) discusses work on merged datasets from the UK - one detailing occupation & wages, the other looking at R&D and investment. As firms become more innovative they will outsource higher fraction of low-skilled occupations, however they will also invest more in training and retaining low-skilled workers with useful 'soft' skills. Success of industries or countries during a period of technological revolution (such as the advance of AI) depends on good labour policies and investment in education and training.