GenAI use by informal ventures. A mixed-method approach of business affordances

The informal economy is pervasive in developing countries, ranging from 20 percent to more than 50 percent in Latin American countries. Informal entrepreneurs are vulnerable due to their lack of skills and business capabilities, which prevents them from entering the formal economy, yet they use open technologies to manage business processes. The adoption and use of GenAI by SMEs have been analyzed in the literature, but vulnerable groups are still unaddressed. Informed by affordance theory, which addresses potential actions and interactions between GenAI and a sample of 20 in-depth interviews with informal entrepreneurs in Mexico, preliminary findings show that: (1) GenAI is currently helping informal enterprises to better communicate with customers and get quick information to support their problem solving, generate content to support their campaigns on Facebook and TikTok for promotion and communication (perceived affordances), (2) optimizing business processes (potential affordances), such as inventory, automating order taking and helping to write contracts and basic accounting to avoid costly services, are at an early stage but are considered to have potential, (3) hindered affordances, such as loss of personal touch with customers and over-reliance leading to deskilling, may prevent informal entrepreneurship from using GenAI.

Bio:

Pavel Reyes Mercado is a marketing professor at the Universidad Anahuac Mexico, where he has been teaching courses in Fundamentals of Marketing and Pricing Analysis for the past 10 years. His academic research analyses the adoption of technological innovations as drivers of consumer demand and well-being. He has published over 30 research papers, chapters, and three books. His most recent research papers deal with mixed methods. He has professional experience in manufacturing and service industries and is a member of the Academy of Marketing Science. He holds a Ph.D. in Administrative Sciences from EGADE Business School, Mexico.