From spark to launch – An empirical study of how AI shapes organizational innovation capability across new product development stages

Abstract

This study examines how artificial intelligence (AI) shapes organizational innovation capability across three stages of new product development (NPD)—concept development, product development, and implementa tion—and investigates whether employees' AI competence amplifies these effects. Drawing on a cross-sectional survey of 400 managers in Germany, we find that greater AI usage intensity is associated with higher innovation capability at each stage, with the strongest gains in concept development. Benefits decrease in later stages, where successful progress demands more human expertise, physical interaction, and emotional intelligence, areas in which current AI tools remain comparatively weak. These results challenge assumptions of uniform AI utility throughout NPD and argue for fit-to-task deployment. Furthermore, employees' AI competence significantly strengthens the relationship between AI use and innovation capability, underscoring the need to pair technology investments with workforce upskilling. Thus, managers should allocate AI resources strategically to match stage- specific demands, prioritize concept development for near-term impact, and cultivate skills that unlock AI's value in product development and implementation. This study advances the literature on AI-enabled innovation by offering a stage-contingent perspective and highlighting human–AI complementarity as key driver of innovation outcomes. Overall, the findings provide guidance for organizations seeking to maximize innovation via targeted AI strategies.