The Impact of Artificial Intelligence and Digitalization on the Workforce: A Skill-Biased Technological Change and Human Capital Perspective

Abstract: The increasing pace of diffusion of Artificial Intelligence (AI) and digitalization is radically re-organizing labour markets world-over, but micro-level empirical data on the interaction of automation exposure and organizational reskilling to influence employee job-security perceptions are limited. This paper is based on the Skill-Biased Technological Change (SBTC) theory and Human Capital Theory (HCT) and creates a mediated moderation model where organizational reskilling provision mediates and moderates the association between AI exposure and job-security concern. A total of 240 respondents in the manufacturing, logistics, retail, healthcare, and IT industries were used to collect primary data using a structured questionnaire. Pearson Chi-square, correlation analysis, descriptive statistics and multiple regression (OLS) were used. The chi-square test also ensured that there was no direct significant relationship between automation exposure and job-security concern (χ² = 3.28, df = 8, p = 0.916). But the regression analysis indicated that the reskilling provision has strong and negative predictive result of job-security concern (β = -0.34, p < 0.001) and that AI exposure interacting with reskilling has a strong attenuative effect on concern (β = -0.21, p = 0.018). The perception of positive automation had a strong influence on the optimism regarding the creation of new jobs (β = 0.47, p < 0.001). These results build on the SBTC model by showing that the exposure to automation is not the determinant of psychological employment outcomes but the organizational human-capital investment reaction. The research provides evidence to inform policymakers to build reskilling infrastructures and organization leaders to build human-AI partnerships.

Keywords: Artificial Intelligence; Digitalization; Workforce Transformation; Skill-Biased Technological Change; Human Capital Theory; Job-Security; Reskilling; Mediated Moderation; Regression Analysis