Predicting the Innovation Capability for Firm Performance: the role of Artificial Intelligence in the Philippines Startups Perspective

Startups are introduced to address changing societal needs, market demands, and survive in the sphere of innovation competition. This study develops an extended model of innovation capability and open innovation for startup performance with the role of artificial intelligence. The model was examined through a survey of startup founders and co-founders in the Philippines. This study used descriptive and structural equation modeling to examine constructs involved in innovation capability. The results show that innovation capability and open innovation strongly affects financial and operational performance. Furthermore, artificial intelligence positively affects innovation capability, and open innovation, from the startups perspective. Also, results show that artificial intelligence affects ideation and organizing structures, and management of technology while artificial intelligence has negative effect on know-how development in innovation capability. This study indicates that innovation capability with consideration of artificial intelligence for startups can result in worthwhile progress and opportunities. This work introduces research directions and practical recommendations on innovation capability and open innovation for startup performance.