Chapter 2: The Discovery of Opportunities with Nigel Wadeson
This chapter presents a conceptual framework that can be used to analyse the process of entrepreneurial opportunity discovery. An opportunity can be considered as a project whose exploitation would be advantageous to the entrepreneur. The entrepreneur has to use judgement in deciding which projects are most worth implementing. One important aspect of this is the question of how the entrepreneur is to apply judgement in deciding what information to gather, given the need to economize on the costs of doing so. 2.1 INTRODUCTION The concept of opportunity plays a central part in entrepreneurship theory (for example, Kirzner, 1979; Shane, 2003; Sarasvathy et al., 2003), though the term ‘opportunity’ has been employed in different ways by different writers, and this has created some confusion. Kirzner (1973), for example, suggests that opportunities are like dollar bills blowing around on the sidewalk, waiting for an alert individual to pick them up. Schumpeter (1934), by contrast, suggests that opportunities require large amounts of capital to exploit, and that the commitment to exploit them can be found only in minds of the highest order. When used in some contexts, ‘opportunity’ seems to signify merely an idea about how to earn a profit. In the economic literature, it often relates to an unexploited ‘activity’, but it remains unclear what sort of ‘activity’ this would be. The purely metaphorical nature of Kirzner’s example, and the very exceptional activity described by Schumpeter, reinforce this notion that the concept of opportunity is difficult to apply in practice. This chapter...
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