More than just Plug and Play: Early Evidence on Organisational Capital and AI Adoption

This paper provides early evidence that AI adoption by firms is linked to management practices in unique ways. Using panel data from the UK Management and Expectations Survey (MES), we find that firms with higher baseline management scores are significantly more likely to adopt AI. This relationship is specific to AI: the same management practices show no relationship with the adoption of other technologies such as robotics, specialized equipment, or specialized software. We also find that management capabilities related to performance measurement appear strongly related to AI adoption. These results suggest that organisational complementarities are specific to different technologies, with implications for policies to encourage AI adoption by firms.