Artisanal intelligence and the importance of creating use: an empirical case study of an Italian luxury fashion new venture

Addressing the business challenges outlined by Håkansson and Waluszewski (2007), this study explores the notion that innovation is not an isolated occurrence but a process that transcends through the developing, producing, and using settings (DPU). In the era of sustainable and digital transitions marked by advancements in artificial intelligence (AI), virtual reality (VR), and unstable geopolitical contexts, small firms are developing innovations in a challenging and turbulent business landscape. Small firms characterised by limited technological and organisational resources rely on inter-organisational interactions to establish the innovation process. A critical obstacle often encountered by small firms in developing innovation paths is the lack of effective resource combinations within the network, particularly in the ‘using’ setting. The survival of SMEs’ business innovation in a turbulent business landscape, particularly in a non-predefined ‘using’ setting, has been scarcely investigated. Therefore, this study explores how small firms combine resources to unfold the innovation path in a turbulent business landscape. This research adopts the industrial network theoretical lenses and investigates an empirical case study of an Italian luxury fashion firm that combines AI and VR technologies with traditional artisanal know-how. The 4R model integrated with DPU settings forms the theoretical framework through which data have been collected and simultaneously analysed following an abductive approach. The findings underscore the critical importance of the ‘using’ setting in the innovation process. Furthermore, the study sheds light on how resource combining enacts a new ‘using’ setting, which validates and amplifies the original innovation. Contributing to the Industrial Marketing and Purchasing (IMP) literature, this study highlights the pivotal role of network dynamics and resource combinations in the survival of innovation in a turbulent business landscape.