Epidemic effects in the diffusion of emerging digital technologies: evidence from artificial intelligence adoption
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Date
2024-03
Publication Type
Journal Article
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yes
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Abstract
The properties of emerging, digital, general-purpose technologies make it hard to observe their adoption by firms and identify the salient determinants of adoption. However, these aspects are critical since the patterns related to early-stage diffusion establish path-dependencies which have implications for the distribution of the technological opportunities and socio-economic returns linked to these technologies. We focus on the case of artificial intelligence (AI) and train a transformer language model to identify firm-level AI adoption using textual data from over 1.1 million websites and constructing a hyperlink network that includes >380,000 firms in Germany, Austria, and Switzerland. We use these data to expand and test epidemic models of inter-firm technology diffusion by integrating the concepts of social capital and network embeddedness. We find that AI adoption is related to three epidemic effect mechanisms: 1) Indirect co-location in industrial and regional hot-spots associated to production of AI knowledge; 2) Direct exposure to sources transmitting deep AI knowledge; 3) Relational embeddedness in the AI knowledge network. The pattern of adoption identified is highly clustered and features a rather closed system of AI adopters which is likely to hinder its broader diffusion. This has implications for policy which should facilitate diffusion beyond localized clusters of expertise. Our findings also point to the need to employ a systemic perspective to investigate the relation between AI adoption and firm performance to identify whether appropriation of the benefits of AI depends on network position and social capital.
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Publication status
published
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Book title
Journal / series
Volume
53 (2)
Pages / Article No.
104917
Publisher
Elsevier
Event
Edition / version
Methods
Software
Geographic location
Date collected
Date created
Subject
Artificial intelligence; Inter-firm diffusion; Epidemic effects; Web data; Text mining; Technology policy
Organisational unit
02525 - KOF Konjunkturforschungsstelle / KOF Swiss Economic Institute
06333 - KOF FB Innovationsökonomik / KOF Innovation Economics
Notes
Funding
187560 - Digital transformation: how it changes organizations, performance, and markets – a multi-level analysis (SNF)