Understanding the skill provision of the I4.0 digital transformation: evidence from Italian companies

This study aims to assess how the adoption of new digital/Industry 4.0 technologies has spurred the demand for both technical and business skills, and whether such skill requirements are met through hiring and/or training. To this end, we use a representative sample of about 950 Italian companies that took part in both waves of a unique survey. We find that the implementation of Industry 4.0 technologies is associated with an increase in both technical skills and business skills. Moreover, significant heterogeneity emerges when we separately consider software, hybrid and machine-based technologies, as well as when we distinguish between hiring and training needs. Specifically, we observe that technologies with a strong software component are more closely associated with business skills, which are mainly sourced through hiring; conversely, hybrid technologies (e.g., IoT) are more closely associated with the demand for new technical skills, which are mostly integrated through training. These findings may help enhance the match between labour demand and supply, especially in this particularly uncertain and complex scenario.