Artificial Intelligence and Technology Entrepreneurship in Informal Contexts

This study explores how small informal firms in developing countries employ artificial intelligence (AI) to advance business formalisation and strengthen technology entrepreneurship. Drawing on a systematic literature review (SLR) combined with bibliometric analysis of Scopus and Web of Science data, the findings reveal that AI-enabled tools such as chatbots, automated payment systems, and machine learning support record keeping, compliance, and customer engagement, thereby facilitating partial formalisation. At the same time, these technologies allow firms to sustain adaptive informal practices, highlighting their operation in a liminal space between formality and informality. By demonstrating how AI enables firms to formalise some processes while bypassing others, the study challenges binary views of formal versus informal economies. The chapter contributes to institutional theory and informal entrepreneurship literature, offering insights into AI’s role in the formalisation trajectories of small firms. The research is limited by its reliance on two databases, which constrains generalisability.