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Entrepreneurs in a competitive economy face three fundamental problems. They need to search for and discover a business opportunity (Kirzner, 1973), evaluate it (Knight, 1921), and then seize the opportunity to reap entrepreneurial profits (Schumpeter, 1911) (Langlois, 2007). The problem that we address is how the ability to exploit business opportunities is influenced by entrepreneurial search and the economic organization of entrepreneurship (Arrow, 1962; Lippman & Rumelt, 2003b; Aghion et al., 2005; Foss, Foss, & Klein, 2007). In many cases, the discovery for a new business opportunity needs to be motivated by expected gains, since the search and evaluation of business opportunities is a costly, resource-consuming process (Denrell, Fang, & Winter, 2003; Nickerson & Zenger, 2004; Foss & Klein, 2005; Teece, 2007; Foss & Foss, 2008).¹ We show the critical role of expectations for understanding of the economic organization of entrepreneurship, and argue that transaction cost economics, with its insistence on bounded rationality, but farsighted contracting offers useful insights and presents rich opportunities for further theoretical and empirical research (cf. also Furubotn, 2002).

A proposed explanation for why business creation is often found to increase in recessions is that there are two components to entrepreneurship – “opportunity” and “necessity” – the latter of which is mostly counter-cyclical. Although there is some agreement on the conceptual distinction between these two factors driving entrepreneurship, there is little consensus in the literature on empirical definitions. The goal of this chapter is to propose an operational definition of opportunity versus necessity entrepreneurship based on the entrepreneur's prior work status (i.e., based on previous unemployment) that is straightforward, based on objective information, and empirically feasible using many large, nationally representative datasets. We then explore the validity of the definitions with theory and empirical evidence. Using datasets from the United States and Germany, we find that 80–90% of entrepreneurs are opportunity entrepreneurs. Applying our proposed definitions, we document that opportunity entrepreneurship is generally pro-cyclical and necessity entrepreneurship is strongly counter-cyclical both at the national levels and across local economic conditions. We also find that opportunity vs necessity entrepreneurship is associated with the creation of more growth-oriented businesses. The operational definitions of opportunity and necessity entrepreneurship proposed here may be useful for distinguishing between the two types of entrepreneurship in future research.

This chapter explores how the recognition of opportunities regarding developing technology and entering a new market is influenced by the systemic effect of social forces. These include institutions, social networks and the entrepreneur’s cognitive frames. This study adopts a longitudinal perspective by capturing and analysing the phenomenon in two moments: first, when the businesses started to operate domestically and second, when they began to internationalise. The cases of five Brazilian technology firms are analysed. The findings reveal the systemic and mutually reinforcing effect of these social forces on the recognition of opportunities. The entrepreneurs’ cognitive frames were particularly vital in recognising opportunities to enter the Brazilian market. The institutional support provided by universities along with government mechanisms and entrepreneurs’ social networks were essential to accrue experiential and non-experiential knowledge of international markets, therefore contributing to the recognition of international opportunities. The temporal perspective employed in this research assists the understanding of how historical events shape entrepreneurs’ capabilities to recognise and change company discourse to pursue the recognition of international opportunities. The results provide guidelines for researchers, practitioners and policy-makers, particularly in the emerging economies in Latin America, to support the growth and flourishing of entrepreneurial ventures through pursuing international opportunities.

Over the last ten years, researchers have increasingly focused on the pursuit of opportunity as one of the central acts of entrepreneurship. This chapter proposes a model of opportunity recognition which emphasizes the process through which entrepreneurs interact with their social contexts to develop opportunities, that is, to develop and shape ideas into attractive opportunities. The central research question is “how does an individual use his or her social context to recognize opportunity?” The question can be re-phrased in two parts, highlighting the two sides of the influence process. First, how do the people around the individual affect both the entrepreneurial thinking process and the opportunity ideas? And second, how does the individual structure his or her social context and use the people surrounding him or her for recognizing and pursuing opportunities?

This study explores how open innovation (OI) can be instrumental for entrepreneurs in sensing and seizing entrepreneurial opportunities in small and medium enterprises (SMEs). This study also illustrates how OI can help SMEs overcome the liability of smallness.

This is exploratory research using an inductive, multiple-case study approach. This study capitalizes on five in-depth case studies of European SMEs to explore a phenomenon using replication logic and provide a robust basis for theory building.

This study presents a holistic view of the OI process in SMEs and illustrates the crucial role of entrepreneurs. The study provides a better understanding of how OI can help entrepreneurs sense and seize entrepreneurial opportunities by envisioning venture ideas and implementing business model innovation through the management of innovation partners.

The study emphasizes two critical roles of entrepreneurs in implementing OI in SMEs. First, the entrepreneur can be the instigator of strategic change, and second, he/she can orchestrate the innovation network. The findings emphasize that OI helps avoid knowledge corridors at the venture idea stage, leading to a (re)structuring of the business model and the emergence of a network of innovation partners, which should be managed hands-on. This study discusses in detail the two crucial roles of entrepreneurs.

This paper aims to highlight the possibility that the same cultural and/or institutional environment can differentially affect each of the two moments of entrepreneurship – opportunity identification and opportunity exploitation. It is possible that the cultural and institutional environment in a particular place may encourage opportunity identification, but discourage opportunity exploitation, or vice versa. Specifically, this paper argues that understanding entrepreneurship in Trinidad and Tobago requires that we focus on how Trinidadian culture and institutions differentially affect both moments of entrepreneurship.

To examine how Trinidad and Tobago’s culture and institutions affect entrepreneurial opportunity identification and exploitation in that country, the paper uses a qualitative approach. In total, 25 subjects agreed to interviews, conducted in July and August 2009 in Trinidad. The questions were geared at understanding attitudes toward work and entrepreneurship in Trinidad, and how politics, culture and ethnicity interacted with those attitudes. The paper also examined institutional indicators from the Economic Freedom of the World: 2013 Annual Report and the World Bank’s 2016 Doing Business Report.

The research identified features of the cultural and institutional environment in Trinidad and Tobago that help to explain why opportunity identification is relatively common among all ethnic groups there, but why opportunity exploitation appears relatively suppressed among African–Trinidadians. In particular, the research finds that the inheritance of British institutions, a post-colonial political culture, a post-colonial business culture and ethnically based social networks all have positive and negative influences on each moment of entrepreneurship.

Further research would involve an analysis of a wider set of both formal and informal entrepreneurial activities in Trinidad and Tobago, across industries and periods.

This paper has implications for understanding the complex nature of entrepreneurship, which many policymakers try to encourage, but which is shaped by deep cultural and historical factors, and also indirectly influenced by state policies and laws.

Ethnic patterns in entrepreneurship shape the way groups see themselves and others.

While authors writing about opportunity recognition/identification and opportunity exploitation have captured the important dimensions of entrepreneurship, they underestimate the possibility of a disconnect between entrepreneurial identification and exploitation. Focusing on instances where the disconnect exists allows us to move away from characterizations of cultures as progress-prone or progress-resistant, and instead allows us to focus on these gaps between identifying and exploiting entrepreneurship across cultures.

This study aims to examine corporate social responsibility (CSR) with the opportunity- and innovation-based view of multinational subsidiaries (MNSs) in Vietnam. While CSR has traditionally been investigated in the developed market, this paper demonstrates how MNSs can take advantage of their CSR practises and create business opportunities and innovation activities for themselves and local society in Vietnam.

This is an exploratory qualitative research-based on four MNSs that have practised CSR in Vietnam. Data were collected from 18 individual interviews with managers and business leaders in four case firms.

This study finds that CSR activities in the studied firms potentially drive new business opportunities and innovation in the form of product, process, idea and management practises. In addition, both opportunities and innovation also benefit MNSs and the local community in Vietnam.

The paper makes clear that CSR literature varies depending on the different countries or areas where the studies take place and these studies tend to focus on a specific area that was appropriate within a particular socio-economic and political context. Given that the business context in Vietnam is characterised by opportunities and incentives for innovation from the socio-economic of the context of a South East Asian developing market, the research provides an important first step in the integration and consolidation of CSR practises, opportunities and innovation. In light of the findings presented above, the study provides an important contribution to the CSR literature, particularly the CSR practises of multinational corporations (MNCs) in developing countries.

The study suggests that CSR practitioners in Asian emerging countries should ground themselves in an understanding of the local society and try to gain an understanding of the priorities of local stakeholders. MNCs should develop an appreciation of the context in which CSR is initiated, as addressing such issues often inspires firms to bring in social innovations in the form of products, services and processes and discover or create opportunities based on the emergent social problems through business solutions that overall benefit their business and local stakeholders.

This is one of the first studies to explore the interaction between MNSs undertaking CSR and business opportunities and innovation in the context of a developing country – Vietnam.

By integrating the resource management perspective and the optimal distinctiveness perspective, the purpose of this paper is to explain how firms configure their managerial ties and competences to identify entrepreneurial opportunities.

Using survey data collected from 238 firms in a transition economy, this paper tests a model of firms’ exploration and exploitation competences under which managerial ties promote or constrain opportunity discovery.

The paper finds that managerial ties are positively related to opportunity discovery. More importantly, competence exploration strengthens the impact of business ties on opportunity discovery, whereas it weakens the impact of political ties. On the contrary, competence exploitation strengthens the effect of political ties on opportunity discovery, whereas it weakens the impact of business ties.

First, the findings enrich the social network perspective of opportunity recognition by linking managerial social ties to opportunity discovery in the context of a transition economy. Second, this paper adds to current understanding of the resource management perspective and the optimal distinctiveness perspective by exploring the fit between different managerial ties (business ties vs political ties) and different competences (exploration vs exploitation) in contributing to opportunity discovery.

This paper aims to investigate the relationships between student creativity, various opportunity search strategies, and the viability of business ideas developed during an entrepreneurship education module.

The paper sets out hypotheses on the associations between individual creativity, opportunity search strategies and the viability of business ideas generated. A group of 117 students provided the sample data by participating in pre‐programme and post‐programme surveys. Explorative factor analysis was employed to examine latent variables, and factor structures were confirmed by confirmatory factor analysis. Structural equation modelling was then used to test the resulting hypotheses.

The results show that creativity is not directly associated with the viability of the business idea. Creativity does, however, strengthen the creative opportunity search strategies and the use of opportunity identification strategies based on knowledge acquisition. Accordingly, the influence of creativity on the viability of the business idea is fully mediated by those opportunity search strategies that are creative and based on knowledge acquisition. They both have a positive effect on the perceived viability of the business idea.

The study illustrates the co‐existence of art and science in the process of recognising entrepreneurial opportunity, which involves individual action and reflection in order for a viable business idea to be developed.

Although creativity is perceived as a valuable element of the generation of business ideas, it has to be accompanied by opportunity search activities in order to generate viable business ideas. The findings emphasise the role of creative behaviour in devising the business idea and also of incorporating creative thinking into business planning.

The paper contributes to the theoretical understanding of how individual creativity affects the viability of business ideas as well as the way in which students search for business opportunities.

Even if in a traditional perspective the discovery and the exploitation of opportunities are associated to the entrepreneur’s capabilities, a relational perspective is required to better analyze the phenomenon of starting up a new venture. The growing attention to interaction with the external environment has been emerging as a precondition of the entrepreneurial processes as it creates the knowledge and the experience necessary to perceive the opportunity. The entrepreneurial opportunities are created through joint acts with others through social relationships. Shifting the attention from social to business relationships, the main aim of this paper is to investigate the discovery and the exploitation of collective entrepreneurial opportunities in starting up new business. In particular, the purpose of this paper is to analyze the role of relational proximity in the entrepreneurial journey considered as an emergent process of transforming potentiality into actuality.

The paper applied a qualitative methodology (Dubois and Araujo, 2004) and a case study approach (Barrat et al., 2011). The case concerns the dyadic spin-off relationship between the innovative start up, ShapeMode (the generated firm), and the Milan FabLab (the generating firm) located in Lombardy Region (Italy).

The emerging of collective entrepreneurial opportunities could be analyzed at two levels: the first one concerns the dyadic spin-off relationship, while the second one is founded on the business relationships that the start-up can activate with the business partners of the generating firm. The collective entrepreneurial opportunities are positive influenced by jointness of the actors and their co-evolution, founded on the shared values and goals.

Although the case study approach allowed the researcher to gain detailed information about the spin-off relationship, this effort does not measure the performance outcomes of the relationships and actions that were taken to improve the competitiveness of the start-up. Future studies would benefit from a large-scale questionnaire given to the members of the start-up and to the actors of its Entrepreneurial Network, so to analyze all of its performance implications for the start-up and the network as a whole. In addition, it could be of interest for future research to investigate the effects of collective entrepreneurial opportunities in order to examine this topic more deeply.

From a managerial point of view, even if the growing number of start-ups has been associated to a temporary phenomenon, the development of new ventures is now consolidated. A new managerial approach is required to promote the birth and the growth of the start-ups. The development of a new venture requires to shift the attention from the collection of financial resources to the exploitation of entrepreneurial opportunities generated by interconnected business relationships. In this way a relevant attention should be recognized to the new role of organizations that can be considered as facilitators of business relationships, such as the FabLab. This paper sheds light on the relevance of the strategic networking that sustains the generation of collective entrepreneurial opportunities. The networking involves actors that belong to different geographic area and different countries but that are focused on the same business dream related to the exploitation of potentialities of digital fabrication. The policymakers should recognize the role of the FabLab as facilitator of knowledge diffusion concerning digital fabrication.

The entrepreneurial opportunities such as the starting up of a new business and its evolution, are enacted, discovered and exploited through interconnected business relationships. In particular the main entrepreneurial opportunities are generated by the activation of business relationships with new business actors. Focusing on the dyadic spin-off relationship, the exploitation of collective entrepreneurial opportunities depends on the sharing of third actors. The business partners of the generating actor (FabLab) became business partners of the generated actor (start-up). The evolution of the generating firm (FabLab) influenced the birth and the evolution of the generated firms (start-up). The dyadic relationship allows the generated firm to discover entrepreneurial opportunities and to exploit them, accessing to the business partners of the generating firm. The effectiveness of the spin-off relationship sustains the replication of the model of new firm generation, that could benefit from the relationships of the two actors of the dyad. Moreover the strong relationships are founded on relational proximity that is characterized by the sharing of values, vision and business dreams.