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This study explores the concept of an "organizational technology ladder," illustrating how the adoption of remote work technology during the COVID-19 pandemic influences subsequent generative AI adoption within firms. By analyzing U.S. job-posting data and employing an instrumental-variables approach, the research finds that a 10 percentage point increase in remote hiring correlates with a 0.4 percentage point increase in job postings mentioning generative AI. The findings suggest that remote work adoption enhances firms' technical and managerial capabilities, facilitating the transition to generative AI technologies, particularly in organizations with lower perceived remote productivity.
A 10% increase in remote hiring can boost generative AI job postings by 0.4%, revealing a critical link between remote work and advanced technology adoption.
This study proposes that firms move along an"organizational technology ladder": adopting one technology transforms hiring and work processes and builds skills and organizational capital that change the cost of adopting subsequent technologies. I study how firms'adoption of remote work technology during the COVID-19 period shaped later uptake of generative AI. Using U.S. job-posting data and an instrumental-variables strategy based on predicted differences in labor-market pressure to offer remote work, I estimate that a 10 percentage point increase in remote hiring in 2021-2022 increases the share of job postings mentioning generative AI in 2023-2024 by 0.4 percentage points across firms and 0.7 percentage points across occupations within firms. I provide evidence on mechanisms consistent with a technology-ladder channel: remote work adoption shifts hiring toward technical and managerial capabilities that predict faster conversion of generative AI exposure into adoption. Firms with return-to-office mandates---interpreted as revealing low remote productivity---exhibit a substantially larger response of generative AI adoption to remote work, consistent with an organizational frictions channel.