Full article: [[Shane, S. 2000. Prior knowledge and the discovery of entrepreneurial opportunities|/static/files/MBI/Module%206/READINGS_Shane_OrgSc2000.pdf]] Key points: # Opportunity discovery is a function of the distribution of information in society # Entrepreneurs discover opportunities based on the information they already possess. ## Entrepreneurs do not alwasy select between alternative market opportunities for new technologies ## The source of entrepreneurship lies in difference of information about opportunities. ## Individual differnces influence the opportunities that people discover, how their entrepreneurial efforts are organized and how the government can influence this process. ''Summary'' # Any technological change will generate opportunities that are not obsvious to all potential entrepreneurs # Entrepreneurs can and will find opportunities without searching for them # Entrepreneurs will only find opportunities related to their prior knowledge [[Entrepreneurial theories]] <<tiddler [[Entrepreneurial theories]]>> Implications of these differences: # If the neoclassical assumption that everyone has equal possibility to identify opportinities is false, then entrepreneurs cannot select between alternative opportunities # Everyone with access to the information has equal chance to become an entrepreneur, this is more consistent with the research done on personality attributes of entrepreneurs # In the Austrian model, Opportunity exploitation seems to be closely related to opportunity discovery (and not so much to other human personality attributes) # The underlying differences of the models have significant impact on how governments can influence entrepreneurial climate. Model propositions: |Proposition|Statement|Evidence|h |1|All individuals are not equally likely to recognize any given entrepreneurial opportunity|| |2|People can and will discover entrepreneurial opportunities without actively searching for them|''Proved'': Evidence was found that superiority at discovery is situation specific| |3a|Peoples prior knowledge about markets will influence their discovery which markets to enter to exploit a technology|''Proved'': In most cases prior knowledge of the markets was crucial| |3b|Peoples prior knowledge about how to serve markets will influence their discovery of how to use a new technology to serve a market|''Proved'': In most cases prior knowledge on how to serve the market was crucial| |3c|Peoples prior knowledge of customer problems will influence their discovery of products and services to exploit a new technology|''Proved'': Most entrepreneurs had prior knowledge of the customer problem, either by being a customer themselves, as a supplier or through education| Implications for entrepreneurs: # Better to discover opportunities in what you know than in what is popular with other entrepreneurs. # Evaluation of opportunity involves comparing opportunities to one's own opportunity costs and liquidity and uncertainty premiums, not comparing one's own opportunity to other entrepreneurs. # Entrepreneurs should obtain control over the rights to exploit new technology to improve their profitability of receiving funding.