REALISING FULL POTENTIALS OF ARTIFICIAL INTELLIGENCE (AI) IN A DIGITAL ECONOMY: A NUMERICAL REVIEW APPROACH

Abstract

Artificial Intelligence (AI) is widely considered as a driving force in the current digital economy, with many firms having already invested in AI. Since AI is unconstrained by humans' cognitive limitations and inflexibility, and thus a key assumption in popular press is that AI is crucial for firms' success in digital economy. However, surprisingly, many managers indicate they are yet to benefit from their AI investments. To address this issue, this paper summarises the extant literature on AI in business and management fields to identify how AI can create competitive advantages and underpin the key barriers that prevent AI from realizing its full potentials. Our results suggest AI can increase revenue by improving employee productivity, increasing consumer evaluation, setting competitive price and creating unique resources. AI can also reduce cost by improving efficiency and reducing risks. However, our results also indicate that AI adoption, task nature and AI management are the key barriers preventing AI from realizing its full potentials. This is because AI lacks interpersonal skills. Thus, it is encouraged that future research should focus on improving AI's interpersonal skills.