Empowering Entrepreneurs: The Mediation Role of AI Adoption in Cognitive Skill and Product Innovation

Abstract

The rapid increase in the incorporation of artificial intelligence (AI) into entrepreneurial environments is altering the adoption of cognitive skills and innovative products by entrepreneurs. In spite of the increasing popularization of the field of digital entrepreneurship, there is a lack of empirical data on the way cognitive skill development is transformed into product innovation via AI-based processes. In this study, the authors explore the mediating effect of the adoption of AI on the correlation between the development of cognitive skills and product innovation in entrepreneurs. A 7-point Likert-scale survey was carried out on 201 entrepreneurs working in a variety of industries using a positivist research philosophy and a quantitative cross-sectional design to collect the required data. The hypothesized relationships were tested using structural equation modeling and mediation analysis. The results show that cognitive skill development has a significant effect on the adoption of AI and product innovation. Further, the role of AI in mediating the relationship between cognitive skills and product innovation shows that AI is used by entrepreneurs to apply analytical, problem-solving, and decision-making skills to innovative product results. The research will contribute to the existing literature on entrepreneurial cognition and digital innovation, as it provides empirical evidence of the mediating role of AI and highlights the synergistic relationship between cognitive competence and the adoption of technologies. Practical implications highlight the importance of AI literacy courses, cognitive skill-building policies, and policy frameworks that drive innovation in order to enable entrepreneurs to thrive in digitally active settings.