Generative AI as a transformative force for innovation: a review of opportunities, applications and challenges

Purpose This study examines the existing literature on generative artificial intelligence (Gen AI) and its impact across many sectors. This analysis explores the potential, applications, and challenges of Gen AI in driving innovation and creativity and generating ideas. Design/methodology/approach The study adopts a comprehensive literature review approach, carefully assessing current scientific articles on Gen AI published from 2022 to 2024. The analysis examines trends and insights derived from research. Findings The review indicates that Gen AI has significant potential to augment human creativity and innovation processes as a collaborative partner. However, it is imperative to prioritize responsible development and ethical frameworks in order to effectively tackle biases, privacy concerns, and other challenges. Gen AI is significantly transforming business models, processes, and value propositions in several industries, but with varying degrees of effect. Findings indicate also that despite the theory-driven approach to investigating Gen AI's creative and innovative potential, cutting-edge applications research prioritizes examining the possibilities of Gen AI models. Research limitations/implications Although this review offers a picture of great possibilities, it concurrently underlines the necessity for a deep knowledge of Gen AI nuances to fully harness its capabilities. The findings indicate that continuous research and exploration efforts are required to address the challenges of Gen AI and assure its responsible and ethical implementation. Therefore, more study is needed on enhancing human-AI collaboration and defining ethical norms for varied circumstances. Originality/value This study presents a relevant analysis of Gen AI's transformational potential as an innovation catalyst. It emphasizes major potential, applications across industries, and ethical issues for responsible integration.