The Uneven Impact of Generative Artificial Intelligence on Entrepreneurial Performance: Evidence from a Field Experiment in Kenya

Scalable and low-cost artificial intelligence (AI) assistance has the potential to improve firm decision making and economic performance, particularly in emerging markets. However, running a business involves a wide range of open-ended problems, making it unclear whether and how recent advances in AI can help business owners around the world make better decisions. In a field experiment with Kenyan entrepreneurs, we evaluated the impact of AI advice on small business revenues and profits by randomizing access to a GPT-4-powered AI business assistant. Although we are unable to reject the null hypothesis of no average treatment effect on firm revenues and profits, we find that the effect for entrepreneurs who were low performing at baseline is over 0.20-standard-deviations lower than for initial high performers. Subsample analyses show that low performers did nearly 10% worse because of the AI assistant, whereas high performers may have benefited by over 15%. This differential impact does not appear to result from differences in the questions posed to the AI or the advice that it provided but rather, from the advice that entrepreneurs chose to implement. More broadly, these results show that generative AI is already capable of impacting real-world business performance—although in uneven and sometimes unexpected ways.

This paper was accepted by Anita McGahan, business strategy.

Funding: This work was supported by the Weiss Fund, Harvard Business School, Berkeley Haas, the Cora Jane Flood Endowment at Berkeley Haas, the Agency Fund, the South Park Common Social Impact Fellowship, and the Digital Data Design Institute at Harvard.

Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2024.06909.