ARTIFICIAL INTELLIGENCE AND INNOVATION PRACTICES: A CONCEPTUAL INQUIRY

Abstract

Discourse on artificial intelligence runs noticeably along with the developments of computing technology. At the same time, the business environment become more uncertain, ambiguous, and competitive, which requires organizations to innovate for their sustainability continuously. This paper aims to broaden innovation management knowledge, particularly in applying artificial intelligence. The behavioural Theory of the Firm is a framework for writing this conceptual inquiry. To do so, artificial intelligence can assist organizations in processing information companies need to create incremental and radical innovations. Specifically, artificial intelligence is useful in overcoming barriers to innovation (during information processing and search processes) and generating and developing ideas and solutions. Furthermore, adopting artificial intelligence in innovation management is determined by the level of organizational capability in information processing, which consists of three levels: exploitation, expansion, and exploration. Then, economic, technological and social forces are argued as factors that can push organizations to adopt artificial intelligence. The challenges faced in the adoption process can come from technical aspects of technology, individual aspects, and interaction between technology and humans. The final part of this manuscript describes the future research agenda that can be carried out related to artificial intelligence and innovation management.