The drivers of AI adoption maturity and the domino effects on frugal innovation adoption and social impact

Abstract

Purpose This paper aims to examine the role of market competition, artificial intelligence (AI) adoption maturity and consumer pressures significantly in frugal innovation in the manufacturing sector. It also explores the potential impact of market competition and consumer pressures on AI adoption maturity and the impact of these interactions on social impact. Design/methodology/approach The empirical data for this study were collected through a structured survey from 331 managers, heads of departments and AI specialists in the manufacturing sector of Jordan and analyzed using the Smart PLS program. Findings The results revealed that market competition and consumer pressures significantly impact AI adoption maturity and frugal innovation. The findings also confirmed that AI adoption maturity significantly improves frugal innovation efforts. Furthermore, it was found that AI adoption maturity significantly moderates the role of frugal innovation in creating social impact. Research limitations/implications This study is constrained by a sample of manufacturers in Jordan and one questionnaire that could limit generalization of results and predispose the study to bias. Furthermore, the quantitative cross-sectional type is not able to show the dynamics of the temporal nature or qualitative settings of the relationships between the variables. Therefore, this paper recommends further research, which is geographically and cross-sector extended, the utilization of longitudinal designs and the utilization of qualitative research to investigate causal associations and the processes of organization and culture in more depth. Practical implications The model can be applied in practice by businesses to understand how the adoption and maturity of AI can affect rational innovation and responsiveness to market and consumer pressures. It helps companies to develop strategies that could contribute to the increase of the positive social value of innovations and add competitiveness. The management can use this model to focus on the investments it has made in technology and expand the capacity needed to become a successful innovator. Originality/value The contribution of the present research lies in its focus on the institutional and social features of frugal innovation, which has a notably strong role to play to maximize it, but the maturity of AI plays a key role in this. This study can not only research the direct relationships between variables but also examine the relationship between the institutional forces, digital changes and innovation of firms. It provides practical suggestions on the necessity to invest in AI to become a sustainable, frugal innovator. Additionally, it is a good academic contribution because it integrates not only methodological novelty with AI but also social elements, in this way expanding the horizons of future studies in the area of AI adoption, frugal innovation and social impacts of innovation.

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