Publications
Publications
- 2023
- HBS Working Paper Series
The Uneven Impact of Generative AI on Entrepreneurial Performance
By: Nicholas G. Otis, Rowan Clarke, Solène Delecourt, David Holtz and Rembrand Koning
Abstract
There is a growing belief that scalable and low-cost AI assistance can improve firm
decision-making and economic performance. However, running a business involves
a myriad of open-ended problems, making it hard to generalize from recent studies
showing that generative AI improves performance on well-defined writing tasks. In
our five-month field experiment with 640 Kenyan entrepreneurs, we assessed the impact
of AI-generated advice on small business revenues and profits. Participants were
randomly assigned to a control group that received a standard business guide or to a
treatment group that received a GPT-4 powered AI business mentor via WhatsApp.
While we find no average treatment effect, this is because the causal effect of generative
AI access varied with the baseline business performance of the entrepreneur:
high performers benefited by just over 20% from AI advice, whereas low performers
did roughly 10% worse with AI assistance. Exploratory analysis of the WhatsApp
interaction logs shows that both groups sought the AI mentor’s advice, but that low
performers did worse because they sought help on much more challenging business
tasks. These findings highlight how the tasks selected by firms and entrepreneurs for
AI assistance fundamentally shape who will benefit from generative AI.
Keywords
AI and Machine Learning; Performance Improvement; Small Business; Decision Choices and Conditions; Kenya
Citation
Otis, Nicholas G., Rowan Clarke, Solène Delecourt, David Holtz, and Rembrand Koning. "The Uneven Impact of Generative AI on Entrepreneurial Performance." Harvard Business School Working Paper, No. 24-042, December 2023.