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Automation & the Future of Work: When Artificial Intelligence Meets Schumpeterian Innovators

Author

Listed:
  • Yonghun Jung

    (Korea University Sejong Campus)

  • Seong-Hoon Lee

    (Korea University Sejong Campus)

  • Jong Kook Shin

    (Korea University Sejong Campus)

Abstract

Building on the task-based production models augmented with Schumpeterian innovation, we develop a theoretical framework to analyze the labor market impacts of the introduction of artificial intelligence (AI) to the R&D sector. Innovators allocate scientists’ time between automation of existing tasks and creation of new varieties of tasks to maximize their profits. The introduction of AI or general-purpose R&D technologies expands the frontier of the automation possibility set to encompass all existing tasks. In this milieu, task innovators prioritize the automation of the most profitable tasks – which depends on taskspecific wage, market size, capital productivity, and the innovator’s bargaining power. Therefore, unlike the previous waves of automation, new “AI” based automation technologies can pose a significant threat to high-skilled workers. Moreover, the advent of new R&D technologies raises the cost of creating new tasks and slows down the obsolescence of existing ones. Combined with faster task automation, ironically, the dynamics of the R&D sector may eventually decelerate widening income inequality among workers.

Suggested Citation

  • Yonghun Jung & Seong-Hoon Lee & Jong Kook Shin, 2025. "Automation & the Future of Work: When Artificial Intelligence Meets Schumpeterian Innovators," Korean Economic Review, Korean Economic Association, vol. 41, pages 5-41.
    • Handle: RePEc:kea:keappr:ker-20250101-41-1-01
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    References listed on IDEAS

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    More about this item

    Keywords

    Automation; Artificial Intelligence; R&D; Labor Market; Income Inequality;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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