Artificial Intelligence as a Complement to Other Innovation Activities and as a Method of Invention

Guillermo Arenas Díaz, Mariacristina Piva () and Marco Vivarelli ()
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Guillermo Arenas Díaz: Università Cattolica del Sacro Cuore
Mariacristina Piva: Università Cattolica del Sacro Cuore
Marco Vivarelli: Università Cattolica del Sacro Cuore

No 18175, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This study investigates the relationship between Artificial Intelligence (AI) and innovation inputs in Spanish manufacturing firms. While AI is increasingly recognized as a driver of productivity and economic growth, its role in shaping firms’ innovation strategies remains underexplored. Using firm-level data, our analysis focuses on whether AI complements innovation inputs - specifically R&D and Embodied Technological Change (ETC) - and whether AI can be considered as a Method of Invention, able to trigger subsequent innovation investments. Results show a positive association between AI adoption and both internal R&D and ETC, in a static and a dynamic framework. Furtheremore, empirical evidence also highlights heterogeneity, with important peculiarities affecting large vs small firms and high-tech vs low-tech companies. These findings suggest that AI may act as both a complement and a catalyst, depending on firm characteristics.

Keywords: Artificial Intelligence; method of invention; R&D; innovation inputs; innovative complementarities (search for similar items in EconPapers)
JEL-codes: O31 O32 (search for similar items in EconPapers)
Date: 2025-10
New Economics Papers: this item is included in nep-ain, nep-sbm and nep-tid
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