No silver bullet: Cognitive technology does not lead to novelty in all firms

Abstract

Cognitive technologies including artificial intelligence (AI) represent new ways for firms to create novelty, from finding hidden patterns in data to expanding combinatorial innovation options. All firms should be able to derive value from these approaches, but whether the impacts are felt equally remains unclear. This study sheds light on this dilemma by exploring whether different learning modes and knowledge integration mechanisms yield different innovation outcomes from cognitive technology use. For a representative sample of publicly listed Australian firms, data from a survey coupled with secondary financials reveals strong differences. Scientific and technology-based innovation (STI) firms benefit strongly, implying high-technology firms using codified knowledge can create and sustain an uneven competitive advantage. However, firms innovating by doing, using, and interacting (DUI) – such as service-based firms – yield incremental innovations. These firms may use cognitive technology to solve discrete problems and not for combinatorial innovation, an indication that the myopia of learning extends to the digital domain.