Exploring AI adoption in manufacturing: An empirical study on effects of AI readiness

Despite the promising potential of Artificial Intelligence (AI) in manufacturing, many companies remain hesitant to fully embrace this transformative technology, casting doubt on their preparedness for AI integration. While previous research has initiated the exploration of the relationship between AI readiness and AI adoption, empirical analyses in this domain are still scarce. To bridge this gap, we investigate how firms technological and organisational AI readiness, individually and in combination, influence the adoption of AI in manufacturing companies. Leveraging extensive empirical data from the German Manufacturing Survey, encompassing 1334 firms, we employ both descriptive and multivariate analysis. Our findings demonstrate that companies need to cultivate a robust AI readiness across both technological and organisational dimensions to facilitate successful AI adoption. Nevertheless, our approach unveils a gap between AI readiness and actual AI adoption: while manufacturing companies appear to have considerable levels of AI readiness, they are still reluctant to successfully implement AI in production processes. The results also show that companies are pursuing different strategies in the development of AI capabilities. Moreover, our analysis uncovers significant disparities among firms, highlighting the crucial role of certain firm-specific characteristics for AI adoption. Particularly interesting is our result about the u-shaped relationship between the company size and AI adoption as well as the relevance of the product complexity.