While distance may seem unimportant in the face of technological progress in transportation and communication, several studies have found that distance is a barrier to the diffusion of inventive activity and technology adoption. This column examines US firms' adaptation and adoption of artificial intelligence in response to AI innovation. The authors find that distance from innovation hotspots reduces growth in AI research jobs as well as in jobs adapting AI to new industries, with the effect driven by AI publications rather than AI patents. Twenty percent of the overall distance effect is explained by the presence of state borders, which may impede migration and thus flows of tacit knowledge.

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25 October 2024

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Vox EU

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https://cepr.org/voxeu/columns/distance-innovation-barrier-adoption-artificial-intelligence

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