University at Albany, State University of New York
Some firms adopt artificial intelligence (AI) technologies aiming to boost their exceptional performance. Scaling firms face many challenges in this process, but one particularly important challenge to resolve is their human resource strategy. Drawing on the literature on dynamic capabilities (DC) and viewing a (non)investment in AI as a firm’s strategic choice, we assess its impact on exceptional performance. Using the UK micro-level data on 1001 firms during 2019-2023, we track changes in their routines pertaining, on one side, to AI adoption and on the other – to the strategic development of human capital. Distinguishing between outliers – firms exhibiting exceptional growth in sales, employment, or productivity – and superstars – ones that excel in all three criteria, we find that combined adoption of AI technologies rather than their individual use significantly increases a firm’s propensity of becoming an exceptional performer. This study provides empirical evidence on how firms striving to achieve absolute exceptional performance while adapting to the AI disruption may develop their human resource strategy: quantitatively, by increasing the rate of employment, or qualitatively, by hiring STEM workers and investing in the development of human capital – strategically and operationally.
