When Generative AI Builds or Undermines Entrepreneurial Capability

Abstract

Abstract: Generative AI (GenAI) is rapidly becoming foundational cognitive infrastructure for entrepreneurship. Yet a critical question remains: why does GenAI enhance entrepreneurial capability for some while quietly eroding it for others? Responding to the ETP Special Issue’s call to move beyond main-effect accounts, this study advances a human-GenAI cognitive engagement framework that explains when GenAI functions as a competence-development rather than a competence-erosion tool. Drawing on goal orientation theory and entrepreneurial cognition, we demonstrate that GenAI’s effects depend on the joint configuration of entrepreneurs’ initial competence and motivational orientation, revealing a paradoxical downside of GenAI-enabled efficiency largely overlooked in entrepreneurship research.