Sources of Opportunities

Shane (2003) describes an entrepreneurial opportunity as: “...a situation in which a person can create a new means-end framework for recombining resources that the entrepreneur believes will yield a profit. This definition of an entrepreneurial opportunity is useful in that entrepreneurial opportunities are about two things: something happening in the environment (resources) and something to do with the individual (creation, beliefs, recombination). Since opportunities are not always profitable the key word “believes” is well placed. With these definitions in place, it is now necessary to examine the research stream on entrepreneurial opportunities to see how often the individual and the environment have come together as a focus. Most studies of the business start-up process fall into one of three areas: 1)focusing on the individual entrepreneur 2) his environment or 3) the actual activities undertaken by the entrepreneur during the start-up process. Sources of Opportunities If opportunities have such an integral role in entrepreneurship, where do they come from and what are their characteristics? Researchers have categorized the sources of entrepreneurial opportunity in many different ways: i. Discipline - psychology, sociology, economics, management, ii. Level of analysis (micro, meso, macro), iii. The institutional landscape, iv. Demand and supply (market) factors, v . Government policy. In each discipline two factors are continually in interaction: the individual and the environment. Joseph Schumpeter and Israel Kirzner have two perspectives on how this interaction occurs, what kind of entrepreneurship is created and what benefits are given to society. Schumpeter takes a creative viewpoint where opportunities offer the possibility of creating new means (frameworks) as well as new ends. These opportunities are new, innovative and have the capacity to shift economies, increase national output and employment. Kirzner sees opportunities as needing to be discovered