Enhancing the Innovation by empowering AI capabilities: The role of Servitization and Absorptive Capacity - A Pilot Study
Febrine Pentadini (a*), Yu-Fen Chen (b)

a) College of Management, Da-Yeh University, Changhua, Taiwan
No.168, University Rd., Dacun, Changhua, Taiwan
*febrinepentadini[at]gmail.com
b) Department of Business and Administration, Da-Yeh University, Changhua, Taiwan

Abstract

The advent of Artificial Intelligence (AI) and its capabilities predicted to catalyst the innovation, meanwhile the impact of servitization on product innovation remains controversial. This research examines the relationships between AI capabilities and product innovation by considering the role of servitization and absorptive capacity. We developed and empirically tested a model using structural equation modeling (SEM) by employing Smart PLS 3.0 with a scanty data as a pilot study from 45 firms in Taiwan and Indonesia. The finding shows the positive impact of AI capabilities with four sub-dimensions on product innovation which mediated by servitization. The absorptive capacity positively moderated the causal relation between AI capabilities and servitization. This pilot study suggests to the literature by determining the effect of AI capabilities on product innovation by considering servitization and absorptive capacity.

Keywords: AI capabilities, Servitization, Absorptive Capacity, Product Innovation

Topic: Business and Economic