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.
# 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:
|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.
Thu, 03 Jun 2010 21:31:44 GMT
Thu, 03 Jun 2010 21:31:44 GMT