Navigating Rugged Innovation Landscapes: How Inventor AI Thinking Shapes Their Innovation

In this paper, we theorize that inventors’ AI thinking, developed through their experience in applying AI science, functions as a cognitive framework that significantly enhances their ability to navigate rugged innovation landscapes. This is significant because it shifts the understanding of AI from a mere functional tool to a transformative cognitive approach, fundamentally shaping how inventors conceptualize and solve complex problems. By introducing a novel measure of AI thinking, our empirical analysis, based on data from 3,398,403 inventors between 1982 and 2017, reveals that inventors with more advanced AI thinking generate more patents with higher technological and market value. Furthermore, we uncover that AI thinking influences innovation through two key mechanisms: it drives inventors to strategically focus on established expertise while also exploring rapidly evolving domains (innovation direction) and encourages a concentrated approach to knowledge sourcing and technological breadth (innovation scope). Our findings emphasize the need for firms to strategically acquire and develop talent with AI thinking, optimize team composition, and align innovation efforts with strategically important areas.