Abstract
For almost 50 years now, following the trail of issues raised by economists such as Hayek, Schumpeter, Kirzner, and Arrow, researchers have studied the economics of technological change and the problem of allocation of resources for invention (invention being the production of information). The bulk of this literature simply assumes that new technical information will either be traded as a commodity or become embodied in products and services (hereafter called “economic goods”), without addressing any specific mechanisms or processes for the transformation of new information into new economic goods or new economic entities (such as new firms and new markets). It is inside this gap that we begin our quest for the concept of an “entrepreneurial opportunity.”
Although we are not usually explicit about it, we really postulate that when a market could be created, it would be.
Kenneth Arrow (1974a)
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Notes
- 1.
Just so stories (based on Rudyard Kipling’s (1909) collection of short stories of the same title) are stories that explain why things are the way they are. Such stories also tend to celebrate things the way they are – subscribing to the fallacy that because certain things came to be, there is some element of “optimality” or “correctness” attached to their origin and structure. This approach leads us to discount the significance of pre-histories because if existence by itself is the starting point of theory building, almost any story could ex-post serve as sufficient explanation for the pre-history. One delightful example is the story of an arbitrage struggle between an elephant and a crocodile that explains how the elephant came to have a long trunk! Relatedly, almost all the social sciences seem perfectly capable of explaining every creation after the fact, but can predict nothing before the creation.
- 2.
The term “invention” need not be limited to technological (i.e., science-based) inventions. Inventions can occur in all spheres of human activity – in the arts (surrealism), in sports (snowboarding), and in philosophy (pragmatism), to name only a few.
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Sarasvathy, S.D., Dew, N., Velamuri, S.R., Venkataraman, S. (2010). Three Views of Entrepreneurial Opportunity. In: Acs, Z., Audretsch, D. (eds) Handbook of Entrepreneurship Research. International Handbook Series on Entrepreneurship, vol 5. Springer, New York, NY. https://doi.org/10.1007/978-1-4419-1191-9_4
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