A systematic literature review of entrepreneurial opportunity recognition: insights on influencing factors

Abstract

In the last three decades, research studies investigating how individuals recognize entrepreneurial opportunities have advanced rapidly and have become a key topic in the modern entrepreneurship literature. To advance this important concern further, we present a systematic literature review of the entrepreneurial opportunity research field and its status. Contrary to conventional wisdom, this research suggests that the field is fragmented and empirically underdeveloped. A comprehensive literature analysis shows that only a handful of authors have contributed specifically to developing dialogues related to opportunity recognition and that the topic is considered primarily as an ancillary issue by many authors and academic journals. Based on analyzing 180 articles, we classify existing contributions into six influential factors: prior knowledge, social capital, cognition/personality traits, environmental conditions, alertness, and systematic search. Moreover, by developing a framework, we communicate critical insights regarding the opportunity recognition process. The contribution of individual articles to the proposed factors is presented in a research synthesis table. We conclude by presenting several directions for future research related to opportunity recognition. Int Entrep Manag J

Analysing the Role of Framework Conditions Influencing International Entrepreneurial Opportunity Identification Process

“…Based on the seminal works of Schumpeter (1934), Kirzner (1973) and Casson (1982), Ardichvili et al (2003) pointed out that opportunities help to meet market demand through the combination of resources by entrepreneurs. Hence, from the entrepreneurship perspective, an opportunity is the result of how entrepreneurs combine resources and capabilities that are at their disposal (Mary George, Parida, Lahti, & Wincent, 2016;Shane & Venkataraman, 2000;Wood & McKinley, 2010). What is also needed is to differentiate a daily-basis chance of doing business from one new product or new services to be delivered to the market, which can originate a new venture.…”

“…Understanding opportunity -as a vital factor within entrepreneurial activities − the conceptual discussion in the literature has turned into the debate as to whether entrepreneurs identify or recognise opportunities (Alvarez et al, 2013;Andersson & Evers, 2015;Ardichvili et al, 2003;Chandra et al, 2009;Chandra et al, 2015;Eckhardt & Shane, 2003;Heilbrunn, 2010;Mainela et al, 2014;Mary George et al, 2016;Oyson & Whittaker, 2015;Shane, 2000;Vaghely & Julien, 2010). This peculiar debate is quite important due to the need to capture the process itself.…”

“…Ardichvili et al (2003) argued that the recognition of opportunities by entrepreneurs is part of the whole opportunity identification process and not an extra one. Given these facts, the authors have agreed that the core of the opportunity identification process is made up of the following stages: being alert (which has been studied under the concept of entrepreneurial alertness), search for information and evaluation, and construction of the opportunity (Mary George et al, 2016). These three main stages are conducted by entrepreneurs in order to develop/exploit an opportunity (Oyson & Whittaker, 2015).…”

“…Individuals sense the needs of the market and propose new ways to satisfy those needs by creating value (Mary George et al 2016). Alertness is conceptualised as a mediator between the personal features of an entrepreneur and the birth of a new venture (Sambasivan, Abdul, & Yusop, 2009).…”

“…By doing so, researchers established some specific factors which exert impulse on the opportunity identification process. In opportunity identification research, authors have greatly contributed to the insights on these specific factors which include; the regulatory environment, culture and norms, prior knowledge and contextual knowledge (Khanna, 2014;Mary George et al, 2016), market incentives and networks. These factors are elaborated below.…”