GENERATIVE ARTIFICIAL INTELLIGENCE IN THE DIGITAL ECONOMY: TRANSFORMING PRODUCTIVITY, INNOVATION AND BUSINESS COMPETITIVENESS

Abstract

Generative Artificial Intelligence (GenAI) has become a transformative technology in the digital economy, significantly influencing productivity, innovation and business competitiveness. This study examines the role of GenAI in improving organizational efficiency, supporting innovation and strengthening competitive advantage across various industries. Using a qualitative approach based on recent academic literature and reports from international organizations, the paper analyzes the opportunities and challenges associated with the adoption of generative AI. The findings indicate that GenAI enhances productivity by automating knowledge-intensive tasks, supporting data-driven decision-making and accelerating research and development activities. Furthermore, it promotes innovation by facilitating creative problem-solving, improving product and service development and enabling new business models. However, the widespread adoption of GenAI also raises concerns regarding data privacy, algorithmic bias, intellectual property, workforce transformation and regulatory governance. The study concludes that maximizing the economic benefits of generative AI requires investments in digital infrastructure, workforce skills, responsible AI governance and supportive public policies. Effective collaboration among governments, businesses and research institutions is essential to ensure that generative AI contributes to sustainable, inclusive and competitive digital economic development.