Shaping the Human Capital Absorptive Capacity: Role of Artificial Intelligence

Abstract

In Pakistan, engineering industries are far behind in manufacturing products as compared to other industries across the world. One of the major reasons behind this failure is the dearth of specific human capital skills to effectively operate artificial intelligence technology. This research aims to investigate the impact of artificial intelligence on human capital and identify significant skills that increase innovation and productivity. The population of this study was the manufacturing industry, specifically the automobile industry of Pakistan. Data were collected through closed-ended questionnaires from those employees who were engaged with artificial intelligence-related projects. Results indicate that artificial intelligence has a positive impact on human capital. The computer, mathematics, and robotic-mechanical associated skills are essential for the effective utilization of this technology towards improving the innovation and productivity of firms. This research is useful for manufacturing organizations to understand the significant relationship between artificial intelligence and human capital. Further, it provides HR Managers with a list of indispensable skills to train their employees to effectively and efficiently deal with artificial technology to increase innovation and productivity in their firms. Moreover, the model of this study opens new avenues for researchers to expand their research work to identify others' human capital skills to increase the performance of the organizations. This is one of the few research studies that have been conducted in the context of Pakistan. It will help to improve human capital skills according to the necessity of the business environment.