According to new research led by scholars from the School of Business at the University of East London, in collaboration with the University of Benin and the LAPO Institute in Nigeria, the use of artificial intelligence is changing how entrepreneurs make decisions, take risks, and adapt to changing situations. The researchers concluded that the role of AI is not just to speed up work, but is actually changing the way entrepreneurs think.
The research was conducted by Dr. Jamiu Odugbesan from the University of East London, along with co-authors Dr. Andrew Tafameland of the University of Benin, Nigeria, and Dr. Dennis Akrawah of the LAPO Institute, Nigeria. The three researchers worked together to explore the effect of regular exposure to AI and digital tools on entrepreneurs working in high-pressure business environments.
The researchers determined that rather than seeing AI as a tool to automate tasks, as many people have seen it, the constant use of intelligent digital tools fosters business owners to develop a more strategic mindset. Entrepreneurs who are aware of and actively utilize AI have demonstrated greater levels of mental agility and a greater ability to adjust their thinking when their circumstances change.
“The changes we are seeing are not a result of AI replacing human thinking, but are resulting from AI changing how entrepreneurs think,” said Dr. Jamiu Odugbesan, the study’s lead researcher at the University of East London. “Entrepreneurs use AI as a partner in their planning process. They use AI to facilitate greater assumption revisions, consider more options, and adapt to changing conditions more easily than previously. AI is broadening the opportunities available for entrepreneurial decision making.”
The researchers conducted an experiment with 376 business entrepreneurs based in Lagos, Nigeria, who were employed at Computer Village. Computer Village is one of the largest technology market areas in West Africa. In terms of a functioning business environment, it has the largest concentration of traders and small businesses in the region.
Computer Village was a suitable location for testing the hypotheses of this research project. Entrepreneurs there experience widespread unanticipated disruptions. These include power outages, speculation on exchange rates and stock markets, and policymakers changing government regulations. The factor that enables entrepreneurs to survive these disruptions is their ability to think quickly and adapt to their circumstances.
The researchers noticed a significant trend within Computer Village as a setting. Entrepreneurs with a higher level of understanding of AI demonstrated a higher level of adaptability than those with a lower level of AI understanding when faced with unanticipated challenges. Those entrepreneurs with extensive AI knowledge were also quicker to modify their strategies and less likely to become paralyzed by challenges when their original strategies failed.
The entrepreneurs in this study did not merely passively utilize AI products and services in the routine operation of their businesses. Rather, they actively used AI and other digital tools to assist them in the process of strategic reasoning. Utilizing AI and other digital tools in this way likely fostered a more expansive approach to business strategy development, as well as a more strategic outlook.
The results of the research demonstrate that the availability of technological resources alone does not create the same benefits for business entrepreneurs. The greatest benefits appear when entrepreneurs consider AI as a partner in their strategic thought process, rather than simply utilizing AI tools passively to bring efficiency.
Individuals who utilized AI systems on a regular basis were more willing to try new options and think outside-the-box. This enabled them to disengage from reacting only to what they perceived as present and start looking toward creating strategies that used AI to proactively anticipate the future.
Dr. Odugbesan stated that “when operating in an uncertain environment, success usually depends far less on having developed the ideal plan and far more on being ready to redesign that plan at the time it is disrupted.”
The results of this research are consistent with previously researched studies that show AI impacts how people reason, plan, and respond to risk. These effects appear in addition to AI’s impact on productivity.
Narrower views of AI training and policies relate to the technical training aspect only. The research findings indicate that inclusion of a broad view of how AI will positively change the way entrepreneurs think could provide additional benefits.
Entrepreneurs using an AI system should be encouraged to think beyond using AI systems as automation solutions. They should begin to develop their decision-making capability using a new approach to problem recognition and business building.
Policymakers will see the impact of supporting digital education in developing nations. Supporting entrepreneurs with access to AI will provide them with the best opportunity to be successful in creating innovative solutions, while increasing the resilience and sustainable growth potential of their businesses.
As such, educators and investors can utilise AI to help entrepreneurs develop new levels of confidence and adaptability in their decision-making and in how they react in market disruption scenarios. These qualities are critical to an entrepreneur’s ability to continue in business.
Research findings are available online in the Journal of Entrepreneurship in Emerging Technologies.
The original story “AI is changing how entrepreneurs think, not just how they work” is published in The Brighter Side of News.
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