Artificial Intelligence and Entrepreneurship

123 Pages Posted: 13 Jun 2024 Last revised: 18 Jun 2024

See all articles by Frank M. Fossen

Frank M. Fossen

University of Nevada, Reno; IZA Institute of Labor Economics

Trevor McLemore

University of Nevada, Reno

Alina Sorgner

Friedrich-Schiller-Universität Jena

Abstract

This survey reviews emerging but fast-growing literature on impacts of artificial intelligence (AI) on entrepreneurship, providing a resource for researchers in entrepreneurship and neighboring disciplines. We begin with a review of definitions of AI and show that ambiguity and broadness of definitions adopted in empirical studies may result in obscured evidence on impacts of AI on en-trepreneurship. Against this background, we present and discuss existing theory and evidence on how AI technologies affect entrepreneurial opportunities and decision-making under uncertainty, the adoption of AI technologies by startups, entry barriers, and the performance of entrepreneurial businesses. We add an original empirical analysis of survey data from the German Socio-economic Panel revealing that entrepreneurs, particularly those with employees, are aware of and use AI technologies significantly more frequently than paid employees. Next, we discuss how AI may affect entrepreneurship indirectly through impacting local and sectoral labor markets. The reviewed evidence suggests that AI technologies that are designed to automate jobs are likely to result in a higher level of necessity entrepreneurship in a region, whereas AI technologies that transform jobs without necessarily displacing human workers increase the level of opportunity entrepreneurship. More generally, AI impacts regional entrepreneurship ecosystems (EE) in multiple ways by altering the importance of existing EE elements and processes, creating new ones, and potentially reducing the role of geography for entrepreneurship. Lastly, we address the question of how regulation of AI may affect the entrepreneurship landscape by focusing on the case of the European Union that has pioneered data protection and AI legislation. We conclude our survey by discussing implications for entrepreneurship research and policy.

Keywords: innovation, opportunity, digital entrepreneurship, AI startups, entrepreneurship, machine learning, artificial intelligence, entrepreneurship ecosystem, digital entrepreneurship ecosystem, AI regulation

JEL Classification: J24, L26, O30

Suggested Citation

Fossen, Frank M. and McLemore, Trevor and Sorgner, Alina, Artificial Intelligence and Entrepreneurship. IZA Discussion Paper No. 17055, Available at SSRN: https://ssrn.com/abstract=4863772 or http://dx.doi.org/10.2139/ssrn.4863772

Frank M. Fossen (Contact Author)

University of Nevada, Reno ( email )

1664 N. Virginia Street
Reno, NV 89557-0030
United States

HOME PAGE: http://business.unr.edu/faculty/ffossen/

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

HOME PAGE: http://www.iza.org/en/webcontent/personnel/photos/index_html?key=2906

Trevor McLemore

University of Nevada, Reno ( email )

1664 N. Virginia St
Reno, NV 89557
United States

Alina Sorgner

Friedrich-Schiller-Universität Jena ( email )

Furstengraben 1
Jena, Thuringa 07743
Germany

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