Scandinavian Working Papers in Economics

Papers in Innovation Studies,
Lund University, CIRCLE - Centre for Innovation Research

No 2022/3: The determinants of AI innovation across European firms

Ioana Igna () and Francesco Venturini ()
Additional contact information
Ioana Igna: CIRCLE, Lund University, Postal: CIRCLE - Centre for Innovation Research, Lund University, PO Box 117, SE-22100 Lund, Sweden
Francesco Venturini: University of Perugia, Postal: Italy

Abstract: Using patent data for a panel sample of European companies between 1995 and 2016 we explore whether the innovative success in Artificial Intelligence (AI) is related to earlier firms’ research in the area of Information and Communication Technology (ICT), and identify which company characteristics and external factors shape this performance. We show that AI innovation has been developed by the most prolific firms in the field of ICT, presents strong dynamic returns (learning effects), and benefits from complementaries with knowledge developed in network and communication technologies, high-speed computing and data analysis, and more recently in cognition and imaging. AI patent productivity increases with the scale of research but is lower in presence of narrow and mature technological competencies of the firm. AI innovating companies are found to benefit from spillovers associated with innovations developed in the field of ICT by the business sector; this effect, however, is confined to frontier firms. Our findings suggest that, with the take-off of the new technology, the technological lead of top AI innovators has increased mainly due to the accumulation of internal competencies and the expanding knowledge base. These trends help explain the concentration process of the world’s data market.

Keywords: AI; ICT; patenting; European firms

JEL-codes: O31; O32; O34

Language: English

45 pages, March 2, 2022

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