From Footloose to Grounded: Domestic Integration in National Innovation Systems for Artificial Intelligence

Research on national innovation systems emphasizes linkages among distributed capabilities but offers limited means of observing whether they are technologically connected. We conceptualize domestic integration as the systemlevel capacity to connect complementary capabilities across techniques, functions, and applications. Using 1.4 million AI-related patents and 330,000 scientificpublications from 1990 to 2021, we operationalize integration through cross-layer alignment and distinguish it from downstream application specialization. Integration is positively associated with quality-weighted inventive performance, but its contribution changes over technological development.Before 2012, it supports inventive performance across levels of specialization, consistent with footloose integration under uncertainty. After 2012, its returns increasingly depend on strong downstream specialization, indicating grounded integration. Cross-layer alignment is also associated with higher patent quality and the reuse and deepening of existing AI combinations rather than radical combinatorial novelty. These findings identify domestic integration as a distinct dimension of national innovative capacity and suggest that technological sovereignty depends less on self-sufficiency than on the capacity to connect and reconfigure complementary capabilities.