Evaluating the Integration of Artificial Intelligence Technologies in Defense Activities and the Effect of National Innovation System Performance on its Enhancement

Abstract

This paper employs graph theory to assess the extent of integration of artificial intelligence (AI) technologies within defense activities and investigates how the performance of the national innovation system (NIS) influences this integration. The analysis utilizes data from 33 countries with defense industries, observed from 1990 to 2020. Empirical findings indicate that the United States (U.S.) leads globally, with a significant gap between the U.S. and other countries. NIS performance increases the level of integration of AI technologies in defense activities, suggesting that policies aimed at strengthening NIS performance should have positive externalities on defense activities in terms of integrating AI technologies. Technological diversification, knowledge localization, and originality are key dimensions of NIS performance that significantly enhance the integration of AI technologies within defense activities. They exhibit similar average marginal effects, suggesting comparable impacts. The cycle time of technologies has an inverted-U shaped relationship with the level of integration.

Keywords: Integration of AI technologies, Defense activities, National innovation system