Driving Sustainable Entrepreneurship Through AI and Knowledge Management: Evidence from SMEs in Emerging Economies

This study investigates how artificial intelligence (AI) capabilities shape sustainable entrepreneurship (SE) among small and medium-sized enterprises (SMEs) in emerging economies. Focusing on knowledge management (KM) as a mediator, entrepreneurial orientation (EO) as a moderator, and government policy support (GPS) as an enabler, the research draws upon the Knowledge-Based View, Dynamic Capabilities Theory, and Institutional Theory. Using data from Saudi Arabian SMEs operating within the Vision 2030 agenda, the structural model demonstrates that AI primarily influences sustainability when firms possess robust KM systems capable of translating digital insights into actionable practices. Both EO and GPS strengthen the conversion of knowledge into sustainable outcomes, where EO fosters innovation and proactivity, and GPS provides essential resources and legitimacy. Nevertheless, excessive reliance on policy incentives may divert firms toward compliance rather than substantive transformation. Conceptually, this paper situates KM at the core of sustainability transformation, with policy support shaping the institutional context. The findings offer actionable guidance for SME managers and policymakers seeking to advance the United Nations Sustainable Development Goals (SDGs) through strategic engagement with AI and KM.