NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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The Impact of Artificial Intelligence on Innovation

Iain M. Cockburn, Rebecca Henderson, Scott Stern

NBER Working Paper No. 24449
Issued in March 2018
NBER Program(s):Productivity, Innovation, and Entrepreneurship

Artificial intelligence may greatly increase the efficiency of the existing economy. But it may have an even larger impact by serving as a new general-purpose “method of invention” that can reshape the nature of the innovation process and the organization of R&D. We distinguish between automation-oriented applications such as robotics and the potential for recent developments in “deep learning” to serve as a general-purpose method of invention, finding strong evidence of a “shift” in the importance of application-oriented learning research since 2009. We suggest that this is likely to lead to a significant substitution away from more routinized labor-intensive research towards research that takes advantage of the interplay between passively generated large datasets and enhanced prediction algorithms. At the same time, the potential commercial rewards from mastering this mode of research are likely to usher in a period of racing, driven by powerful incentives for individual companies to acquire and control critical large datasets and application-specific algorithms. We suggest that policies which encourage transparency and sharing of core datasets across both public and private actors may be critical tools for stimulating research productivity and innovation-oriented competition going forward.

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Document Object Identifier (DOI): 10.3386/w24449

Published: The Impact of Artificial Intelligence on Innovation: An Exploratory Analysis, Iain M. Cockburn, Rebecca Henderson, Scott Stern. in The Economics of Artificial Intelligence: An Agenda, Agrawal, Gans, and Goldfarb. 2019

 
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