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Are software automation and teleworker substitutes? Preliminary evidence from Japan

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  • Richard Baldwin
  • Toshihiro Okubo

Abstract

Digital technology is reshaping workplaces by enabling spatial separation of offices, known as telework, or remote intelligence (RI) and by facilitating automation of service sector tasks via artificial intelligence (AI). This paper is the first attempt to empirically investigate whether AI and RI are complements or substitutes in the service sector. It uses a worker‐level panel of surveys collected from around 10,000 workers from pre‐COVID‐19 pandemic to late 2022. We find preliminary evidence that suggests that AI and RI are complements rather than substitutes. The evidence comes first from the positive correlation of investments in AI‐promoting and RI‐promoting software at the firm and worker level, and second from the positive correlation of workers' expectations regarding telework and software automation. The evidence is far from definitive but suggests that the complement‐substitution question is a fruitful line for future research.

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  • Richard Baldwin & Toshihiro Okubo, 2024. "Are software automation and teleworker substitutes? Preliminary evidence from Japan," The World Economy, Wiley Blackwell, vol. 47(4), pages 1531-1556, April.
    • Handle: RePEc:bla:worlde:v:47:y:2024:i:4:p:1531-1556
    DOI: 10.1111/twec.13496
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