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Digitalization of work and entry into entrepreneurship

Author

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  • Fossen, Frank M.
  • Sorgner, Alina
Abstract
We investigate the relationship of the new wave of digitalization of occupations with entry into different types of entrepreneurship in the United States, including entry into digital entrepreneurship. Based on the Current Population Survey for 2011–18 and using different measures of digitalization that reflect its destructive and transformative impacts on occupations, we provide evidence that digitalization is significantly associated with entrepreneurial entry at the individual level. The results suggest that high-skilled employees and employees in ICT occupations facing destructive digitalization have an increased likelihood of becoming entrepreneurs with unincorporated businesses. However, entrepreneurship does not seem to be a viable option for low-skilled individuals affected by destructive digitalization. We further find that starting an incorporated business is more likely and starting an unincorporated business is less likely for employees facing transformative digitalization. Apparently, advances in AI create opportunities for growth-oriented entrepreneurship, but also increase the opportunity cost of less ambitious entrepreneurship.

Suggested Citation

  • Fossen, Frank M. & Sorgner, Alina, 2021. "Digitalization of work and entry into entrepreneurship," Journal of Business Research, Elsevier, vol. 125(C), pages 548-563.
    • Handle: RePEc:eee:jbrese:v:125:y:2021:i:c:p:548-563
    DOI: 10.1016/j.jbusres.2019.09.019
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    More about this item

    Keywords

    Digitalization; Artificial intelligence; Entrepreneurship; Incorporated; Unincorporated; Digital entrepreneurship;
    All these keywords.

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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