Superhuman science: How artificial intelligence may impact innovation

Ajay Agrawal, John McHale and Alexander Oettl ()
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Ajay Agrawal: University of Toronto
Alexander Oettl: National Bureau of Economic Research (NBER)

Journal of Evolutionary Economics, 2023, vol. 33, issue 5, No 4, 1473-1517

Abstract: Abstract New product innovation in fields like drug discovery and material science can be characterized as combinatorial search over a vast range of possibilities. Modeling innovation as a costly multi-stage search process, we explore how improvements in artificial intelligence (AI) could affect the productivity of the discovery pipeline in allowing improved prioritization of innovations that flow through that pipeline. We show how AI-aided prediction can increase the expected value of innovation and can increase or decrease the demand for downstream testing, depending on the type of innovation, and examine how AI can reduce costs associated with well-defined bottlenecks in the discovery pipeline.

Keywords: Artificial intelligence; Innovation; R&D prioritization (search for similar items in EconPapers)
JEL-codes: D20 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s00191-023-00845-3

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