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

Explainable & Ethical AI

Published: arXiv: 2604.02567v1

Authors

Jackson G. Lu Gerui Gloria Zhao Anna Manyi Zheng

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.

Paper Summary

Problem

The growing use of generative artificial intelligence (GenAI) in entrepreneurship has created a need for a more systematic understanding of its effects. Despite the increasing use of GenAI, research on its impact remains fragmented, limiting the ability to integrate findings and develop a comprehensive understanding of how GenAI use influences entrepreneurs.

Key Innovation

This paper proposes the Empowerment–Entrapment Framework, a stage-based framework that maps GenAI's effects throughout the entrepreneurial process. The framework highlights GenAI's role as a double-edged sword, demonstrating how it can both empower and entrap entrepreneurs at each stage of the entrepreneurial process.

Practical Impact

The Empowerment–Entrapment Framework offers practical implications for entrepreneurs seeking to use GenAI strategically throughout the entrepreneurial process while managing its risks. By understanding the benefits and costs of GenAI use at each stage, entrepreneurs can use GenAI thoughtfully to reduce constraints and expand entrepreneurial possibilities. However, if used uncritically, GenAI may entrap entrepreneurs by fostering illusions of objectivity and capability, fueling overconfidence and premature launch, and weakening essential human skills needed for sustainable venture creation and growth.

Analogy / Intuitive Explanation

Think of GenAI as a double-edged sword in entrepreneurship, where its effects vary across different stages of the entrepreneurial process. On one hand, GenAI can be a powerful tool for generating high-quality venture ideas, boosting entrepreneurial self-efficacy, and increasing productivity. On the other hand, it can also introduce hallucinations and training data biases, heighten entrepreneurial overconfidence, and erode critical thinking, learning, and memory. By understanding GenAI's role as a double-edged sword, entrepreneurs can use it strategically to achieve their goals while minimizing its risks.

Paper Information

Categories:

cs.CY cs.AI cs.ET cs.HC

Published Date:

arXiv ID:

2604.02567v1

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