The Effects of Digital Technology on Opportunity Recognition

Abstract

Recognizing opportunities enabled by digital technology (DT) has become a competitive necessity in today’s digital world. However, opportunity recognition is a major challenge given the influence of DT, which not only disperses agency across various actors, but also blurs boundaries between customers, companies, products, and industries. As a result, traditional entrepreneurship knowledge needs to be rethought and the effects of DT on opportunity recognition need to be better understood. Drawing from opportunity recognition theory – as one of the central theories in the entrepreneurship domain – this study builds on a structured literature review to identify and explain three direct as well as three transitive effects of DT on opportunity recognition. These effects have been validated with real-world cases as well as interviews with academics and practitioners. In sum, this study contributes to descriptive and explanatory knowledge on the evolution from traditional to digital entrepreneurship. As a theory for explaining, the findings extend opportunity recognition theory by illuminating how and why DT influences opportunity recognition. This supports research and practice in investigating and managing opportunities more effectively.

Digital Entrepreneurship: What is New if Anything?

“…However, new digital technologies typically do not create economic value per se, related emerging opportunities need to be identified and pursued for value creation. At the same time, the process of opportunity recognition and exploitation can thereby be influenced by digital technologies itself, as one of the papers in this Special Issue elaborates (Kreuzer et al 2022 ). This relates to the discussion about the self-referential nature of digital innovation (Yoo et al 2010 ).…”

“…As lack of conceptual clarity and unclear boundary conditions are common challenges faced by digital entrepreneurship scholars, our chosen set of articles are all conceptual. Two literature reviews aim to extend theory (Kreuzer et al 2022 ) and explore the roots of digital entrepreneurship to problematize the field and offer future research directions (Kollmann et al 2022 ). Two papers report on case studies that were conducted to explore the importance of context in digital entrepreneurship (Keller et al 2022 ) and build theory to explain post-launch product development in digital ventures (Lehmann and Recker 2022 ).…”

“…Papers explore topics such as dispersed agency, blurred boundaries, digital capabilities, digital product development, and the evolution from Internet entrepreneurship to digital entrepreneurship and stages in between. One paper is atheoretical (Kollmann et al 2022 ), two apply existing theory (Keller et al 2022 ; Kreuzer et al 2022 ), and two aim to build new theory by developing a taxonomy of AI business models (Weber et al 2022 ) and a conceptual model of continuous post-launch product development (Lehmann and Recker 2022 ). Now that the general trends have been described, a brief summary of each article is provided.…”

Sustainable Economic Development Through Entrepreneurship: A Study on Attitude, Opportunity Recognition, and Entrepreneurial Intention Among University Students in Malaysia

“…Identifying the right opportunity is vital for enabling start-up companies to multiply ( Ozgen and Baron, 2007 ). The theory of resource-based view (RBV) emphasises the importance of the “right” resources to attain sustainable competitive advantage ( Kreuzer et al, 2021 ). Both the ability and the competency to recognise opportunities are resources that only a few people possess ( Kim et al, 2018 ).…”

“…Unemployment rates continue to increase with the number of job seekers exceeding the job supply ( Aloulou, 2016 ). Technology nurtures new business opportunities that only the knowledgeable and educated individual can indemnity and reap benefits ( Kreuzer et al, 2021 ). The technology can help offer the right solution for the unemployed competing against one another for limited job openings ( Hassan et al, 2020 ).…”