Enabling artificial intelligence in entrepreneurship: Implications for startup creation in higher education

The digital transformation has reshaped entrepreneurship, with the emergence of artificial intelligence (AI) as a powerful enabler of innovation and startup creation. However, higher education institutions face challenges integrating AI into entrepreneurship education curriculum, limiting students’ ability to fully harness its potential. This study aimed to determine and explore entrepreneurship students’ challenges in using AI for startup development, assess the competencies they gain in innovating business ideas, and analyze how these challenges affect competencies using structural equation modeling (SEM). Employing an convergent mixed-method design, the study surveyed 114 third- and fourth-year BS Entrepreneurship students and conducted interviews to faculty and business plan implementers. Quantitative data were analyzed using descriptive statistics and SEM, while qualitative data underwent thematic analysis for triangulation. Findings revealed that students face significant challenges in opportunity identification, decision-making, performance execution, education and learning, and research application. The key barriers highlight was market understanding, lack of AI literacy, limited mentorship, and insufficient curriculum integration. Despite these, students reported gaining competencies in opportunity recognition, customer targeting, data-informed decision-making, and entrepreneurial communication using AI tools. However, critical thinking, problem-solving, and prototyping skills remained underdeveloped. SEM results indicated that challenges in education, opportunity identification, and decision-making significantly constrained entrepreneurial competencies. The study implies the need for higher education to reform curricula by embedding AI-focused modules, case-based projects, mentorship opportunities, and innovation hubs. Strengthening AI-driven entrepreneurship education will equip students with the competencies required for sustainable startup creation in the digital economy.