AI-Driven Organizational Capabilities and The Innovation Environment: Examining The Drivers of R&D Transformation in Saudi Arabian Start-Ups

  • Authors

    • Abdullah Abdulrhman Alshwaier Graduate School of Management, Post Graduate Centre, Management and Science University (MSU), Shah Alam, Selangor, Malaysia https://orcid.org/0009-0002-1171-6234
    • Muhammad Irsyad Abdullah Graduate School of Management, Post Graduate Centre, Management and Science University (MSU), Shah Alam, Selangor, Malaysia
    https://doi.org/10.14419/072fzx19

    Received date: October 22, 2025

    Accepted date: November 3, 2025

    Published date: November 6, 2025

  • Artificial Intelligence, Innovation Environment, Decision Making, Problem-Solving, Technology Infrastructure, Kingdom of Saudi Arabia

  • Abstract

    Artificial Intelligence is transforming how start-up companies conduct research and development (R&D) and generate value through innovation. This research investigates the impact of AI-based organizational capabilities on decision-making, problem-solving, productivity, customer satisfaction, and technology infrastructure. It also examines how these capabilities foster an innovative climate, enabling innovation in Saudi Arabian start-ups. Using a quantitative cross-sectional research approach that draws on the Technology–Organization–Environment (TOE) and Unified Theory of Acceptance and Use of Technology (UTAUT) frameworks, the present study analyzes survey data from 384 start-ups using Partial Least Squares structural equation modeling (PLS–SEM). As presented in the results section, all five AI-powered capabilities are positively and significantly related to the innovation ecosystem (R² = 0.685); further, technology infrastructure and decision-making have the most significant effect on the innovation ecosystem, and these results underline the importance of AI-aided organizational capabilities in preparing Saudi start-ups to innovate and collaborate in an ecosystem. The research extends the body of theoretical knowledge on AI adoption and guides how entrepreneurs and policymakers can strengthen the Kingdom’s innovation ecosystem in line with Vision 2030.

  • References

    1. Alshamrani, A. (2022). Innovation ecosystems in Saudi Arabia: Challenges and opportunities for start-ups. International Journal of Innovation Management, 26(2), 2250001.
    2. Alasmari, T. (2024). Rethinking AI Acceptance in Corporate: A Human-Centric Extension of UTAUT. Journal of Ecohumanism. https://doi.org/10.62754/joe.v3i8.4936.
    3. Babina, T., Fedyk, A., He, A., Hodson, J. (2024). Artificial intelligence, firm, product innovation. Journal of Financial Economics, https://doi.org/10.1016/j.jfineco.2023.103745.
    4. Badghish, S., & Soomro, Y. (2024). Artificial Intelligence Adoption by SMEs to Achieve Sustainable Business Performance: Application of Tech-nology–Organization–Environment Framework. Sustainability. https://doi.org/10.3390/su16051864.
    5. Baldwin, C., Bogers, M., Kapoor, R., & West, J. (2024). Focusing the ecosystem lens on innovation studies. Research Policy. https://doi.org/10.1016/j.respol.2023.104949.
    6. Bresciani, S., Ferraris, A., & Del Giudice, M. (2021). The role of artificial intelligence in shaping the future of business models. Journal of Business Research, 123, 389–397.
    7. Copeland, B. (2024). artificial intelligence. Encyclopedia Britannica. Inc.: Chicago, IL, USA. https://www.britannica.com/technology/artificial-intelligence.
    8. Dean, T., Zhang, H., & Xiao, Y. (2024). Customer involvement in co-development: problem-solving and decision-making in new product develop-ment. European Journal of Marketing. https://doi.org/10.1108/ejm-12-2022-0917.
    9. Hadchity, M. (2025). Saudi Arabia unveils $1.78bn investments to advance AI and digital talent. Arab News. https://www.arabnews.com/node/2589809/business-economy.
    10. Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2022). A primer on partial least squares structural equation modeling (PLS-SEM) (3rd ed.). SAGE Publications.
    11. Kadim, A., Sutarman, A., Wijaya, A., Rahayu, S., Daeli, O., & Yusuf, N. (2024). Comprehensive Bibliometric Analysis of UTAUT and AI Integra-tion in Business and Management Trends (2015-2024). 2024 3rd International Conference on Creative Communication and Innovative Technology (ICCIT), 1-7. https://doi.org/10.1109/iccit62134.2024.10701240.
    12. Massoudi, A.H., Fatah, S.J., & Jami, M.S. (2024). The Role of Artificial Intelligence Application in Strategic Marketing Decision-Making Process. Cihan University-Erbil Journal of Humanities and Social Sciences. https://doi.org/10.24086/cuejhss.v8n1y2024.pp34-39.
    13. Monshaat. (2023). Annual Report on Small and Medium Enterprises in Saudi Arabia. Saudi General Authority for Small and Medium Enterprises. https://www.monshaat.gov.sa.
    14. Morozov, A.O. (2022). Decision-making. Terms and definitions. Mathematical machines and systems. https://doi.org/10.34121/1028-9763-2022-2-64-67.
    15. Munali, M., Liberna, H., & Mutakin, T. (2024). ANALYSIS OF A PERSON'S PROBLEM-SOLVING SKILLS. Prima: Jurnal Pendidikan Ma-tematika. https://doi.org/10.31000/prima.v8i2.11304.
    16. Muslim, Muslim., Muhammad, Giatman., Nurhasan, Syah., Milana, Milana., Wawan, Purwanto., Dwi, Sudarno, Putra., Zikri, Zikri. (2023). Cus-tomer Satisfaction is Part of Industrial Business Excellence in the Industrial Revolution Era 4.0. Motivection, 5(2):217-232. https://doi.org/10.46574/motivection.v5i2.212.
    17. Neiroukh, S., Emeagwali, O., & Aljuhmani, H. (2024). Artificial intelligence capability and organizational performance: unraveling the mediating mechanisms of decision-making processes. Manag20ement Decision. https://doi.org/10.1108/md-10-2023-1946.
    18. Otto, A., Szymanski, D., & Varadarajan, R. (2020). Customer satisfaction and firm performance: insights from over a quarter century of empiri-cal research. Journal of the Academy of Marketing Science, 48, 543-564. https://doi.org/10.1007/S11747-019-00657-7.
    19. Robin. (2023). The Impact of Employee Motivation on Productivity. International Journal of Health, Economics, and Social Sciences, 5(1):209–221.https://doi.org/10.56338/ijhess.v4i3.2637.
    20. Saudi Data and Artificial Intelligence Authority (SDAIA). (2020). National Strategy for Data and AI. Retrieved from https://sdaia.gov.sa
    21. Saudi Vision 2030 (2021). Vision 2030: Realizing Our Potential. https://vision2030.gov.sa/
    22. Shaikh, N. (2024). Customer Satisfaction in the Service Industry. International Journal of Advanced Multidisciplinary Research and Studies. https://doi.org/10.62225/2583049x.2024.4.3.2904.
    23. Sharma, S., Singh, G., Islam, N., & Dhir, A. (2024). Why Do SMEs Adopt Artificial Intelligence-Based Chatbots? IEEE Transactions on Engineer-ing Management, 71, 1773-1786. https://doi.org/10.1109/TEM.2022.3203469.
    24. The Research, Development, and Innovation Authority (RDIA). (2023). https://www.rdia.gov.sa/docs/RDReport2023.pdf.
    25. Topanica, A. (2025). The importance of effective decision-making in the performance of human resources in business. Prizren Social Science Journal. https://doi.org/10.32936/pssj.v9i1.590.
    26. Tornatzky, L. G., Fleischer, M., & Chakrabarti, A. K. (1990). Processes of Technological Innovation. Lexington books.
    27. Usman, F., Eyo-Udo, N., Etukudoh, E., Odonkor, B., Ibeh, C., & Adegbola, A. (2024). A Critical Review of AI-driven Strategies for Entrepre-neurial Success. International Journal of Management & Entrepreneurship Research. https://doi.org/10.51594/ijmer.v6i1.748.
    28. Van Der Vlist, F., Helmond, A., & Ferrari, F. (2024). Big AI: Cloud infrastructure dependence and the industrialization of artificial intelligence. Big Data & Society, 11. https://doi.org/10.1177/20539517241232630.
    29. Venkatesh, V., Thong, J., & Xu, X. (2012). Consumer Acceptance and Use of Information Technology: Extending the Unified Theory of Ac-ceptance and Use of Technology. Behavioral Marketing eJournal. https://doi.org/10.2307/41410412.
    30. Wu, T., Asmara, A., Huang, Y., & Hapsari, I. (2024). Identification of Problem-Solving Techniques in Computational Thinking Studies: Systematic Literature Review. SAGE Open, 14. https://doi.org/10.1177/21582440241249897.

  • Downloads

  • How to Cite

    Alshwaier , A. A. ., & Abdullah, M. I. . (2025). AI-Driven Organizational Capabilities and The Innovation Environment: Examining The Drivers of R&D Transformation in Saudi Arabian Start-Ups. International Journal of Accounting and Economics Studies, 12(7), 189-196. https://doi.org/10.14419/072fzx19