AI, robots and innovation in European SMEs

Abstract There is increasing interest in the impact of advanced digital technologies on SMEs, but the determinants of their adoption and their association with multiple innovation outcomes remain unexplored. Based on the Flash Eurobarometer 486, this paper analyses how the adoption of artificial intelligence and robots is related to European SMEs carrying out product, process, organizational and marketing innovations. Our results establish scale-ups and start-ups as the most likely adopters of these technologies and the most innovative firms. Furthermore, internal characteristics, such as internationalization and firm size, and external factors, such as the availability of digital skills and infrastructure, are significant drivers of digitalization at the firm level. In a two-stage approach, we find that the adoption of artificial intelligence and robots is associated with all innovation types, although these technologies serve more specialised objectives in manufacturing rather than in service sectors. Our results confirm a significant variability in the adoption of artificial intelligence and robots, as well as heterogeneous associations with innovation outcomes.