The surge of digital-driven R&D and the LLM-assisted intelligent cost review

Abstract

With the development of digital technologies, including artificial intelligence (AI), big data, and cloud computing, there has been a sweeping wave of digitalization across diverse fields and countries. Research indicates that digitalization has driven a surge in research and development (R&D) activities and significantly enhanced R&D efficiency. Cost review is a critical aspect of managing R&D efficiency. However, traditional cost review methods no longer suffice in meeting the demands of the digital era. This raises the question of whether digital technologies, such as LLM, can facilitate an evolutionary shift towards a more automated and efficient cost review approach that synergizes human and machine efforts. This paper validated the positive impact of digital technology on R&D efficiency using a Panel Vector Autoregression (PVAR) model and the impulse response analysis. Based on empirical results, we discussed the role of LLM in cost review and evaluated the potential risks associated with its use. To mitigate these risks, we recommended that integrating LLM with expert insights for analysis and interpretation, ensuring more reliable outcomes.