From AI Use to Sustainable Value Creation Through Entrepreneurial Reconfiguration and Business Model Innovation in SMEs: Evidence from an Emerging Economy

Artificial intelligence (AI) is increasingly used by small- and medium-sized enterprises (SMEs), but its role in sustainable business transformation remains unclear, especially in emerging economies where adoption is often fragmented and experimental. This study examines how AI use is associated with Sustainable Value Creation through Entrepreneurial Reconfiguration Capability (ERC) and Business Model Innovation (BMI). ERC refers to a firm’s capability to interpret AI-enabled opportunities, recombine existing resources, govern experimentation with new value configurations, and decide which AI-related initiatives should be scaled. Using survey data from 385 SMEs in four Ecuadorian sectors and Partial Least Squares Structural Equation Modeling (PLS-SEM), the study tests a sequential model linking AI use, ERC, BMI, and Sustainable Value Creation. The findings show positive associations between AI use and ERC, ERC and BMI, and BMI and Sustainable Value Creation. The results suggest that AI adoption alone is unlikely to be associated with sustainable value unless SMEs develop entrepreneurial capabilities that connect AI use with business model innovation. The study contributes by shifting the focus from AI adoption to AI-enabled entrepreneurial transformation in SMEs from an emerging-economy context. Future research should examine moderating factors related to digital maturity, institutional support, environmental dynamism, firm size, and sectoral conditions.