Generative AI Use in Entrepreneurship: An Integrative Review and an Empowerment-Entrapment Framework

TL;DR

This paper reviews how generative AI impacts entrepreneurship, proposing a framework that highlights its dual potential to empower and entrap entrepreneurs at each stage of the process.

Contribution

It offers an integrative review and a novel Empowerment-Entrapment Framework to understand GenAI's complex effects on entrepreneurs and provides practical guidance for strategic use.

Findings

GenAI can improve idea quality but may cause hallucinations and biases.

It can boost self-efficacy but also increase overconfidence.

GenAI enhances productivity but may erode critical thinking.

Abstract

Despite the growing use of generative artificial intelligence (GenAI) in entrepreneurship, research on its impact remains fragmented. To address this limitation, we provide an integrative review of how GenAI influences entrepreneurs at each stage of the entrepreneurial process: (1) opportunity recognition and ideation, (2) opportunity evaluation and commitment, (3) resource assembly and mobilization, and (4) venture launch and growth. Based on our review, we propose the Empowerment-Entrapment Framework to understand how GenAI can both empower and entrap entrepreneurs, highlighting GenAI's role as a double-edged sword at each stage of the entrepreneurial process. For example, GenAI may improve venture idea quality but introduce hallucinations and training data biases; boost entrepreneurial self-efficacy but heighten entrepreneurial overconfidence; increase functional breadth but decrease relational embeddedness; and boost productivity but fuel "workslop" and erode critical thinking, learning, and memory. Moreover, we identify core features of GenAI that underlie these empowering and entrapping effects. We also explore boundary conditions (e.g., entrepreneurs' metacognition, domain expertise, and entrepreneurial experience) that shape the magnitude of these effects. Beyond these theoretical contributions, our review and the Empowerment-Entrapment Framework offer practical implications for entrepreneurs seeking to use GenAI strategically throughout the entrepreneurial process while managing its risks.