Abstract

Advances in artificial intelligence (AI) have brought the world to the threshold of significant new technological breakthroughs. These developments bring new opportunities and challenges to existing and potential entrepreneurs, raising pressing and promising research questions. We review emerging but fast-growing literature on impacts of 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 entrepreneurship. Against this background, we present and discuss existing theories 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 the regulation of AI may affect the entrepreneurship landscape by focusing on the case of the European Union and its data protection and AI legislation. We conclude our survey by discussing implications for entrepreneurship research and policy.