Do All Roads Lead to Innovation? Unpacking the Effects of Digital Technologies on Innovation Types

Abstract

The digital transformation of economies has taken on a new dimension with the transition from traditional technologies to advanced technologies, such as artificial intelligence and big data analytics. This study examines the relationship between firms' adoption of advanced digital technologies-namely, AI, cloud computing, big data analytics, robotics, smart devices, and blockchain-and innovation, which are classified into six subcategories: product, process, organisational, marketing, ecological, and other innovations. The main contribution of this study is its comprehensive evaluation of the transition to advanced digital technologies, carefully considering the different innovation subcategories. In this study, the dataset from the Flash Eurobarometer 486 survey is analysed using a multivariate probit model, which allows simultaneous estimation while accounting for potential correlations among different types of innovation. According to the study findings, while advanced digital technologies generally support innovation, their effects vary significantly across innovation types. Cloud computing, big data analytics, and smart devices are emerging technologies with strong, widespread effects across all innovation categories. Artificial intel ligence particularly supports product, process, and organisational innovations, whereas robotics technologies are more strongly associated with production related and ecological innovations. In contrast, the impact of blockchain technology is more limited, primarily in organisational and marketing innovations. Overall, the results show that advanced digital technologies do not affect innovation processes uniformly; rather, each technology plays a distinct role depending on the nature of innovation. These findings suggest that firms should align their digital technology investments with their strategic innovation objectives and underscore the importance of policymakers designing digital transformation policies that are sensitive to different types of innovation.