Deciphering AI's Role in Corporate Innovation: A Holistic Framework of AI Resources, Capability, and Performance

Abstract

Breakthroughs in artificial intelligence (AI) have spawned numerous AI companies. Yet, AI's role in facilitating corporate innovation and competence remains understudied. Based on innovation theories, the resource-based view, and the organizational change theory, we develop a holistic framework that integrates organizational AI resources, AI innovation capability, and corporate performance to depict how AI empowers corporate innovation and competence. We propose that corporate AI resources, consisting of data, human, and strategic resources, enhance their corporate performance by improving their AI innovation capability. Furthermore, we propose that a greater extent of human–machine collaboration, the ability of humans to utilize algorithms, and computational power effectively in various contexts improves corporate performance. Finally, we outline the key topics for future research, suggesting areas where further investigation could yield valuable insights into AI's role in corporate innovation. Our article offers actionable insights into companies’ AI resource allocation and new capability building for competing in the AI era. Firms should prioritize a balanced approach to manage their AI data resources, human resources, strategic resources, and human–machine collaboration to effectively enhance AI innovation capability and improve corporate performance. Our article answers how AI resources could empower corporate competence and contribute to AI innovation, organizational change theory, and resource-based view.