AI and Its Impact on Creativity and Diversity: An Empirical Study of LLM-Generated Product Ideas

This research examines how well large language models, or LLMs, generate new product ideas for college students priced under $50. Across a series of studies, we identify key strengths and weaknesses of using LLMs for product innovation. Our first study shows that LLM-generated product ideas have higher average quality than human ideas, based on purchase intent, and are 7 times more likely to rank in the top 10%. Our second study shows that this AI-induced creativity boost is not explained by the LLM's more persuasive pitching skills. Our third and fourth studies identify a weakness of using LLMs for brainstorming: AI-generated ideas are less novel at the idea level and less diverse at the set level. In our fifth study, we analyze prior LLM-based creativity studies and find consistently lower idea diversity across all of them, demonstrating the generalizability of these findings. Our sixth and seventh studies investigate techniques to mitigate this diversity loss. We compare LLMs from different vendors and versions and find that more recent models generate more diverse ideas, though they still fall short of human-level diversity. We also demonstrate techniques that increase idea diversity almost to the level of human idea generation: pooling ideas across vendors; prompt engineering, including Chain-of-Thought prompting and injecting heterogeneous personas or constraints; and creative agents that broadly explore the solution landscape to restore diversity. Finally, in our eighth study, we show that exploiting the near-zero marginal cost of AI idea generation by scaling the number of ideas steadily improves coverage of the idea space, approaching human-level coverage. We conclude by presenting actionable recommendations for innovation managers who want to identify better new product ideas with the help of LLMs.

Using Large Language Models for Idea Generation in Innovation

This research evaluates the efficacy of large language models (LLMs) in generating new product ideas. To do so, we compare three pools of ideas for new products targeted toward college students and priced at 50 dollars or less. The first pool of ideas was created by university students in a product design course before the availability of LLMs. The second and third pools of ideas were generated by GPT-4 from OpenAI using zero-shot and few-shot prompting, respectively. We evaluated idea quality using standard market research techniques to predict average purchase intent probability. We used text mining to assess idea similarity and human raters to evaluate idea novelty. We find that AI-generated ideas outperform human-generated ideas in terms of average purchase intent, with few-shot prompting yielding slightly higher intent than zero-shot prompting. However, AI-generated ideas are perceived as less novel and exhibit higher pairwise similarity, particularly with few-shot prompting, indicating a less diverse solution landscape. When focusing on the quality of the best ideas rather than the average ideas, we find that AI-generated ideas are seven times more likely to rank among the top 10 percent of ideas, demonstrating a significant advantage over human-generated ideas. We propose that this seven-to-one advantage is a conservative estimate because it does not account for the greater productivity of AI. Our findings suggest that despite some drawbacks, AI creativity presents a substantial benefit in generating high-quality ideas for new product development.