Artificial intelligence and radical innovation: an opportunity for all companies?

Nils Grashof () and Alexander Kopka
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Nils Grashof: Friedrich Schiller University Jena
Alexander Kopka: University of Bremen

Small Business Economics, 2023, vol. 61, issue 2, No 15, 797 pages

Abstract: Abstract Artificial intelligence (AI) is often seen as a key technology for future economic growth. However, its concrete effects on the emergence of radical innovations and the associated socio-economic impacts, through increasing divergence between smaller and larger firms, have not yet been systematically researched. This paper addresses this by investigating the extent to which AI-related knowledge influences the emergence of radical innovations and differentiates between SMEs and large firms. Based on a unique dataset of European firms combining firm-level data with patent data, we find a nuanced influence from AI. While AI applications assert a positive influence, AI techniques negatively influence the emergence of radical innovations. Being an SME significantly moderates these effects. Larger firms gain from AI applications, whereas SMEs gain from AI techniques. Therefore, AI knowledge in itself is not a general answer to increase the likelihood of creating radical innovation. Instead, a more differentiated view on AI is needed.

Keywords: Radical innovations; Divergence; AI; Artificial intelligence; Firm level (search for similar items in EconPapers)
JEL-codes: L25 O31 O32 O33 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (6)

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DOI: 10.1007/s11187-022-00698-3

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