A framework for AI-powered service innovation capability: Review and agenda for future research

Artificial intelligence (AI)-powered service innovation (e.g., OpenAI's ChatGPT, Google's Bard and Microsoft's Sydney) has become one of the most significant determinants of firms' success in the Fourth Industrial Revo-lution. However, extant studies on this topic show that research studies hitherto have been ad-hoc, lacking a conceptual framework for the strategic management of AI-powered service innovation capability in dynamic markets. Thus, this study synthesises the current body of knowledge, proposes a framework, and develops an agenda to advance our knowledge. The findings reveal: (1) AI-market capability relates to customer orientation, industry orientation, and cross-functional orientation; (2) AI-infrastructure capability relates to data, business models, and ecosystem; and (3) AI-management capability relates to AI-orientation, organisational learning, and AI ethics which are crucial determinants of forming AI-powered service innovation capability. These capabilities for the strategic management of AI-powered service innovations play an essential role in achieving organiza-tional agility and competitive advantage.