AI-DRIVEN ENTREPRENEURSHIP: TRANSFORMING BUSINESS MODELS IN THE DIGITAL ERA

Abstract

Purpose: The paper will discuss the role of Artificial Intelligence (AI) in changing entrepreneurship through the strengthening conducted for the period of 2014-2025

 of opportunity recognition, increasing dynamic capabilities, and fueling business model innovation in the digital economy.

Design/Methodology/Approach: The study follows a systematic literature review approach, which is based on the model suggested by Tranfield, Denyer, and Smart (2003). The synthesis of peer-reviewed research was conducted for the period of 2014-2025. Structural Equation Modeling (SEM), Confirmatory Factor Analysis (CFA), reliability test and mediation analysis were used to validate the conceptual framework.

Findings: The findings shows that opportunity recognition (b = 0.61, p < 0.001) and dynamic capabilities (b = 0.68, p < 0.001) are greatly improved by AI capability. Business model innovation (b = 0.72, p < 0.001) has a significant influence on competitive advantage by the effects of dynamic capabilities (b = 0.65, p < 0.001). The mediation analysis indicates that AI is a competitive advantage driver, but only to the extent that it brings about structural change processes.

Practical Implications: Entrepreneurs are advised to incorporate AI into the main core business architecture and create the hybrid human-AI collaboration systems. It is the task of policymakers to encourage the diffusion of AI within SMEs and to develop a set of governance that should resolve the issue of privacy, bias, and transparency. The maturity of AI capability should be used by investors as a measure of scaling and resilience.

Originality/Value: The present research unites AI literature and the Dynamic Capabilities Theory, demonstrating that AI is not just a technological instrument but a structural source of business model redesign and long-term competitive advantage.