opportunities and the entrepreneurship nexus- A re-conceptualization
Entrepreneurial opportunities and the entrepreneurship nexus:
A re-conceptualization
Per Davidsson ?
Australian Centre for Entrepreneurship Research,Queensland University of Technology,Australia
J?nk?ping International Business School,Sweden
a r t i c l e i n f o a
b s t r a
c t
Article history:Received 30May 2014Received in revised form 12January 2015Accepted 13January 2015Available online 11February 2015Field Editor:D.Shepherd The literature on “entrepreneurial opportunities ”has grown rapidly since the publication of Shane
and Venkataraman (2000).By directing attention to the earliest stages of development of new
economic activities and organizations,this marks sound redirection of entrepreneurship research.
However,our review shows that theoretical and empirical progress has been limited on important
aspects of the role of “opportunities ”and their interaction with actors,i.e.,the “nexus ”.We argue
that this is rooted in inherent and inescapable problems with the “opportunity ”construct itself,
when applied in the context of a prospective,micro-level (i.e.,individual[s],venture,or
individual –venture dyad)view of entrepreneurial processes.We therefore suggest a fundamental
re-conceptualization using the constructs External Enablers ,New Venture Ideas ,and Opportunity
Con ?dence to capture the many important ideas commonly discussed under the “opportunity ”
label.This re-conceptualization makes important distinctions where prior conceptions have
been blurred:between explananda and explanantia;between actor and the entity acted upon;
between external conditions and subjective perceptions,and between the contents and the
favorability of the entity acted upon.These distinctions facilitate theoretical precision and can
guide empirical investigation towards more fruitful designs.
?2015Elsevier Inc.All rights reserved.Keywords:Opportunity Nexus External enabler New venture idea Opportunity con ?dence
1.Executive summary
In a particular situation,a given individual may conclude that trying to start a new business is a worthwhile thing to do.In other situations that same individual may not be inclined to take entrepreneurial action.Now assume that this individual is a serial entrepreneur.If the career-long track record of this serial entrepreneur could be examined,an oscillating mix of aborted start-up attempts,some outright failures,some minor successes,and perhaps one or more great entrepreneurial triumphs would likely be found.Since the individual is the same,this suggests that knowledge about the person alone cannot explain entrepreneurial action and outcomes.There must be another part to the story.According to Shane and Venkataraman's (2000)seminal article,this other part is the “entrepreneurial opportunity ”and to understand entrepreneurial processes,researchers ought to study both the individuals,the “opportunities ”and their ?t,i.e.,the individual –opportunity nexus.
Whether triggered by Shane and Venkataraman (2000)or not,researchers have since paid considerable attention to “entrepre-neurial opportunities ”.We perform a critical review of 210papers published since 2000in leading journals,which use “opportunity ”in relevant ways in their title,keywords,or abstract.This review shows that this literature has grown very rapidly and that progress Journal of Business Venturing 30(2015)674–695
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E-mail address:per.davidsson@https://www.wendangku.net/doc/7b7679507.html,.au
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has been made on a range of topics.Conceptual distinctions between “discovery ”and “creation ”of “opportunities ”,and between “?rst-person ”and third-person “opportunities ”have achieved some traction.Progress has also been made regarding the sources of “opportunities ”and the evolving nature of entrepreneurial processes.Experimental work has yielded a body of work on prior knowledge and other drivers of the identi ?cation of “opportunities ”and their perceived attractiveness.Thus,increased attention to “opportunities ”seems to have helped open up new and fruitful lines of inquiry.
However,despite its intuitive appeal and apparent early success,the “opportunity ”construct may not provide a sound foundation for further progress in entrepreneurship research.Our review shows that the minority of works that offer a de ?nition of “opportunity ”have radically different ideas about what they essentially are (e.g.,sets of [objective]external conditions vs.individual cognitions vs.social constructions )as well as when,where and why the “opportunity ”label is deserved.Importantly,even with a stated de ?nition authors struggle to apply a consistent view of “opportunity ”within individual works.In short,“opportunity ”is a very elusive concept.
We argue that this lack of construct clarity is a major reason why our review ?nds disappointingly little progress on several core questions pertaining to “opportunities ”and the entrepreneurship nexus.There is very little solid knowledge about what the salient characteristics of “opportunities ”are;how we can identify such entities and measure their characteristics in non-experimental settings,and what direct and actor-moderated effects they have on action and outcomes beyond initial attractiveness assessments.We also argue that many of the problems are inherent in any notion of “opportunity ”and therefore inescapable in research under that label.In particular,the favorability connotation of “opportunity ”is highly problematic in forward-looking research,i.e.,when trying to argue at an early stage how the characteristics of the actor and the “opportunity ”will affect action and outcomes.If the rationale for the “opportunity ”label is the actor's perception of the entity as an “opportunity ”,then characteristics of “opportunities ”cannot explain inaction and we would have to change labels when the actor stops pursuing the former “opportunity ”.If the rationale is instead “objectively ”favorable outcome prospects,then characteristics of “opportunities ”can explain neither inaction nor failure.
On the basis of our review we conclude that “opportunity ”is not a suitable construct for the non-actor nexus component in prospective theory of entrepreneurial processes.Further,we conclude that to capture the many valuable ideas developed under the “opportunity ”label more than one construct is needed.Therefore,in order to facilitate future theorizing and empirical testing we suggest three carefully de ?ned and elaborated constructs be used.The ?rst is External Enablers for the aggregate-level circumstances —such as regulatory changes,technological breakthroughs,and demographic shifts —which may affect a variety of new venture creation attempts by several,different actors.External Enablers are assumed to create room for new economic activities but cannot ensure success for particular ventures that are initiated in response to their occurrence.Neither need they be positive overall for the economy.The second construct is New Venture Ideas .This denotes “imagined future ventures ”;i.e.,imaginary combinations of product/service offerings,markets,and means of bringing these offerings into existence.These can be of any quality and may be evaluated differently by different individuals.New Venture Idea is our main alternative to accompany the actor under the nexus view.Third,we suggest that Opportunity Con ?dence has the important,supplementary role of eliminating perceived favorability from the other two constructs.Hence,Opportunity Con ?dence refers strictly to a particular actor's subjective evaluation of the attractiveness —or lack thereof —of a stimulus (External Enabler or New Venture Idea)as the basis for entrepreneurial activity.
This re-conceptualization makes clear distinctions where prior conceptions have been blurred:between external conditions and subjective perceptions;between actor and the entity acted upon;between the contents and the favorability of the focal entity,and between explanatory factors and that which is to be explained.These distinctions facilitate theoretical precision and can help develop more fruitful designs for empirical https://www.wendangku.net/doc/7b7679507.html,ing the three constructs,we outline ideas concerning theoretical gaps and empirical approaches for future theorizing and testing of phenomena in entrepreneurial processes.We hope that these ideas will encourage research on a range of theoretically and practically important questions by scholars representing a broad set of disciplines,philosophical convictions,and methodological preferences.
2.Introduction
There is growing consensus that entrepreneurship is the process through which new economic activities and organizations come into existence (Davidsson,2003;Gartner,1988;McMullen and Dimov,2013;Shane and Venkataraman,2000;Wiklund et al.,2011).Shane and Venkataraman (2000)argued that “opportunities ”are central to this process and introduced the concept of the individual –opportunity nexus .This notion makes the point that micro-level 1explanations of entrepreneurial action and outcomes should look beyond the individuals involved.Equally important is attention to qualities of the “opportunities ”they pursue,and the ?t between individual and “opportunity ”(cf.Shane and Venkataraman,2001;Venkataraman,1997).Within this framework,a central task for entrepreneurship research is to develop and test theory about how characteristics of “opportunities ”,directly and in interaction with actor characteristics,give shape to entrepreneurial processes.
It only takes a disequilibrium assumption to allow for actors to try new ventures and achieve success with them.This suggests that “opportunity ”in some sense exists.Most would also agree that it is individuals'subjective perception of (?rst-person)opportunity that makes them take entrepreneurial action (McMullen and Shepherd,2006).It is therefore not surprising that the notion of “entrepreneurial opportunity ”has achieved a central role in the academic discourses on entrepreneurship and that the associated
1
Throughout this manuscript “micro ”refers to the individual(s);the (emerging)venture (idea),or the individual-venture dyad;i.e.,the “nexus ”,as opposed to ag-gregate entities such as industries;regions;populations,and economic systems.675
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literature has grown rapidly since the publication of the nexus framework(Busenitz et al,2014).This also marks sound development in at least two ways.First,it is a move away from overly person-focused explanations.Second,it puts the emphasis on the early stages of creation of new economic activities,which is arguably where entrepreneurship research can make its most distinct contributions to the broader?elds of economic and organizational studies.
The research stream has made progress on a range of topics such as the sources of“opportunities”(e.g.,Eckhardt and Shane,2003; Plummer,et al.,2007);different types of“opportunities”(e.g.,Dahlqvist and Wiklund,2011;Eckhardt and Shane,2003;Sarasvathy et al.,2003),and the evolving nature of many entrepreneurial processes(e.g.,Alvarez and Barney,2007;Ardichvili et al.,2003; Dimov,2007a;Wood and McKinley,2010).In work that includes empirical testing,the progress has been most notable regarding prior knowledge and other drivers of the perception/identi?cation/recognition of“opportunities”(e.g.,Baron and Ensley,2006; Grégoire,et al.,2010a;Grégoire and Shepherd,2012;Shane,2000).
However,a systematic review of the literature shows that disappointingly little progress has been made on several core questions pertaining to“opportunities”and the nexus.There is still very little solid knowledge about what the salient charac-teristics of“opportunities”are,and what direct and actor-moderated effects they have at different critical stages of the journey from non-existence to existence of new economic activities.We2argue that this relative paucity of theoretical and empirical progress is rooted in inescapable problems with the“opportunity”construct https://www.wendangku.net/doc/7b7679507.html,ck of construct clarity(Suddaby,2010) across and within works and“conversations”has hampered the building of cumulative knowledge.This stems in large part from the dual nature of“opportunity”as consisting of both contents and(assumed,perceived,or proven)favorability.The favorability aspect of“opportunity”does not sit well in a prospective,process framework aiming to explain not only action and success but also inaction and failure.It is predominantly this aspect of“opportunity”rather than its contents that triggers debate as to its objective vs.subjective nature,and makes it hard to apply the construct consistently and comfortably across actors,space,time,and levels of analysis.Therefore,although the notion of“entrepreneurial opportunity”may appear intuitive-ly appealing and theoretically exciting(Dimov,2011;Short et al.,2010),our analysis suggests it is not a suitable construct for the non-actor nexus component in prospective theory of entrepreneurial processes.
In order to facilitate future theorizing and testing that can realize the intentions behind the nexus framework,we invite colleagues to consider using three carefully de?ned and elaborated constructs that capture more precisely the complex ideas that have been discussed under the opportunity label.The?rst is External Enablers for the aggregate-level circumstances—such as regulatory changes, technological breakthroughs,and demographic shifts—which may trigger and affect outcomes of a variety of new venture creation attempts across a range of actors.The second is our main alternative to accompany the actor under the nexus view:New Venture Ideas.This denotes“imagined future ventures”;i.e.,imaginary combinations of product/service offerings,markets,and means of bringing these offerings into existence.Third,we suggest Opportunity Con?dence strictly for the subjective evaluation of the attractiveness—or lack thereof—of a stimulus(External Enabler or New Venture Idea)as the basis for entrepreneurial activity.Building on insights from previous research,this re-conceptualization makes important distinctions where prior conceptions have been blurred:between explananda and explanantia;between actor and the entity acted upon;between external conditions and subjective perceptions,and perhaps most importantly,between the contents and the favorability of the entity acted upon.These distinctions facilitate theoretical precision and can help develop more fruitful designs for empirical investigations.
Our work makes three contributions.First,we offer a critique of prior research on“entrepreneurial opportunities”,which goes beyond prior critiques and reviews(cf.Arend,2014;Hansen et al.,2011;Korsgaard,2013;Shane,2012;Short et al.,2010)in terms of comprehensive assessment of construct clarity and the progress made so far on“opportunity”characteristics and their effects. Second,and most signi?cant,is the development of a set of carefully de?ned and elaborately described constructs,which capture the ideas commonly associated with“entrepreneurial opportunities”in prior work.We argue that these—External Enablers,New Venture Ideas,and Opportunity Con?dence—are much clearer and less susceptible to internal inconsistency,as well as being more operable and less philosophically contentious.This offers a stronger platform for future micro-level research on the nexus and its non-actor element.Third,we outline ideas concerning theoretical gaps and empirical approaches for future,prospective,micro-level theorizing and testing pertaining to entrepreneurial processes.We hope that these ideas will encourage research on a range of theoretically and practically important questions by scholars representing a broad set of disciplines,philosophical convictions, and methodological preferences.
Below,we?rst provide a quantitative review of the literature,focusing on progress related to Shane and Venkataraman's nexus idea.We then outline our assumptions and criteria for what a prospective,micro-level,nexus theory of entrepreneurial processes should achieve.This is followed by a section explaining why extant views of“opportunity”cannot meet those criteria.We then introduce our suggested,alternative constructs.Finally,we suggest guidelines for future research.
3.Prior use of the opportunity construct in entrepreneurship research:a review
Our examination of the“entrepreneurial opportunities”literature took Short et al.'s(2010)review as vantage point,excluding eight articles published before year2000.Adopting their journal and article inclusion criteria we added all relevant articles published
2After much deliberation,I decided to continue to refer to the author as“we”as I had during the peer-review process.This“we”includes—where applicable,and at their discretion—not only those mentioned in the formal Acknowledgements but also all those colleagues whose prior conceptual and empirical work on“entrepreneur-ial opportunities”were indispensable inputs to developing the ideas expressed in this article.
subsequently.Detailed coding criteria were developed by the author and a PhD quali ?ed assistant.The consistency of the coding was independently cross-checked by another research assistant.3All 210articles included in the review are included and marked “*”in the reference list.Summary results are displayed in Table 1.
An initial observation is that the literature has almost tripled in volume since Short et al.'s (2010)review (cf.Busenitz et al,2014).Further,the proportion of conceptual articles is high,albeit decreasing.Turning to our core issues,we note that only a minority provide a de ?nition of “opportunity ”.In the empirical stream the proportion doing so is under 20%,meaning the vast majority fails to meet Suddaby's (2010:347)“bare minimal standard ”of construct clarity.We provide elaboration further below on the lack of clarity that pertains also to those who do provide de ?nitions.
Further,the data indicate limited progress on the nexus idea and the mechanisms by which “opportunities ”in ?uence entrepreneurial processes.Despite our criteria intentionally biasing the selection heavily towards articles with an “opportunity ”focus,the propositions and hypotheses (Table 1,entries b and j vs.c and k )re ?ect a much stronger emphasis on actor effects.The number of explicit attempts to theorize and test the nexus is very small (g –h )and (o –p ).The proportion of empirical articles citing the nexus idea or hypothesizing “opportunity ”effects remains small,albeit increasing (i ;k ).This is remarkable considering that Shane and Venkataraman (2000)was the most cited entrepreneurship article of the last decade,and the “dominant ”or “consensus ”position in entrepreneurship research authors ascribe to “opportunities ”and the “nexus ”(Busenitz et al.,2014;Korsgaard,2013:130;Plummer et al.,2007:354;Shane,2012:18;van Burg and Romme,2014:372;Suddaby et al.,2014:2;Venkataraman et al.,2012:22).
Returning to de ?nitions,4Table 2demonstrates wide variation in the essential properties assigned to “entrepreneurial opportuni-ties ”.Some view them as a set of [objective]external conditions while others portray “opportunities ”as individual cognitions or social constructions .They are thus variously described as a con ?uence of (pre-existing or created)external circumstances ;imagined future ventures ;future action paths ,or imagined future states .The usage also demonstrates varying or vague scope conditions (cf.Suddaby,2010),especially regarding the supposed actor;the organizational/market/industry context;spatial and temporal boundaries,and the required novelty or pro ?t intent.
Different de ?nitions may re ?ect justi ?able variation across theoretical lenses and philosophical perspectives,so variation across works does not suggest that individual papers fail to de ?ne and apply the construct in a consistent manner that achieves their purpose.Different de ?nitions,and perhaps even the low and diminishing proportion providing a de ?nition at all,would also be less of a problem if the literature were divided into distinct streams,each of which adhered to a common and consistent view.However,publication and citation patterns do not support such an interpretation;individual journals publish “opportunity ”papers representing varying theoretical lenses and works frequently cite several other works representing varying views of “entrepreneurial opportunity ”.More importantly,vagueness and inconsistency in the use of “entrepreneurial opportunity ”also abound within works.Examples are given in Table 3.Moreover,authors who provide a de ?nition typically do not stick to the same de ?nition in subsequent works (see Table 4).
Some authors come up with rather convoluted de ?nitions in an effort to cover all bases (see Table 2:5,6,12;Table 4:14)whereas others appear to deliberately avoid de ?ning the concept while being careful to de ?ne other central constructs.In short,re ?ective authors appear to struggle with the term “entrepreneurial opportunity ”.It is worth reiterating that this is the image that emerges from works published in leading journals with particular attention to those that actually do provide de ?nitions.Variability and ambiguity in the understanding of “opportunity ”is likely to be even greater in works published in less prestigious outlets and among the majority who do not de ?ne “opportunity ”.
The complexity of the meaning of “opportunity ”has been a major theme in the conceptual stream,featuring diverging philosoph-ical perspectives on the nature of “opportunities ”and their relationship to actors (e.g.,Alvarez and Barney,2007;Alvarez et al.,2013;Chiasson and Saunders,2005;Dimov,2007a;2011;Eckhardt and Shane,2013;Klein,2008;Mole and Mole,2010;Sarason,et al.,2006;2010;Vaghely and Julien,2010;Wood and McKinley,2010;cf.also Alvarez and Barney,2010;Foss and Klein,2012:75;Korsgaard,2013;Sarasvathy et al.,2003;Shane,2012).One contrast that has achieved some traction is that by Alvarez and co-workers (refer-ences above)between “discovery ”and “creation ”of “opportunities ”.Another notable distinction is “?rst-person ”vs.“third-person ”opportunities (McMullen and Shepherd,2006;Haynie et al.,2009;Shepherd et al.,2007;cf.Autio et al.,2013;Wood et al.,2014).
3
Speci ?cally,we included articles which according to ABI/Inform had “opportunity ”or “opportunities ”in the title,keywords,or abstract and were published in the 2000-2014(inclusive)period in the following journals:Administrative Science Quarterly ;Academy of Management Journal ;Academy of Management Review ;Entrepre-neurship Theory and Practice ;Journal of Applied Psychology ;Journal of Business Venturing ;Journal of Management ;Journal of Management Studies ;Journal of Organizational Behavior ;Management Science ;Organization Science ;Organization Studies ,Organizational Behavior and Human Decision Processes ;Personnel Psychology ;Strategic Entre-preneurship Journal and Strategic Management Journal.We excluded articles where “opportunity ”clearly did not refer to “entrepreneurial opportunities ”(e.g.,investment opportunities;research opportunities).All quantitative results of our review build on this selection of papers.For the broader preparation of this man-uscript we also engaged other sources,e.g.,the 2007special issue of Small Business Economics ;additional works by key contributors (e.g.,Alvarez and Barney,2010;Foss and Klein,2012;Sarasvathy et al.,2003;Shane,2003;2012)and review/critique articles evaluating aspects of this research stream (Arend,2014;Hansen et al.,2011;Korsgaard,2013).Coding procedures and criteria were developed interactively between the two coders.When reliable criteria had been worked out the remaining cod-ing was completed by the author (some categories were deemed not possible to code reliably,and left out).A research student/assistant cross-checked the completed coding for two sizable sub-samples totaling 57papers or 30%of the articles.This check resulted in over 90%agreement despite follow-on effects in ?ating the number of apparent discrepancies.Rare instances of error in the original coding were corrected.Remaining discrepancies mainly represented genuine ambiguity due to the original work either conceptualizing the phenomena very differently or providing insuf ?cient or inconsistent information.These instances were carefully examined on a case-by-case basis,predominantly resulting in the original coding being retained.For the ?nal version an additional batch of 25recently published papers were identi ?ed and coded by a research assistant and the author,following the same type of procedures.In this ?nal round we noted an increased occurrence of dif ?cult-to-code cases,which may either be stochastic or due to the increased use of models with more complex contingencies.
4To identify de ?nitions we searched all manuscripts for instances of “de ?ne*”;“de ?ni*”;“concei*”;“*unity is ”,and “*unities are ”and also examined the text sur-rounding the ?rst 10occurrences of “opportunity/ies ”in Introduction and Theory sections.677
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Table1
Summary statistics for210articles on“entrepreneurial opportunities”.
Before~2010a2010–14Total
Conceptual4265%5135%9344%
–Thereof in broader,mainstream/disciplinary journals1331%2345%3639%
–Thereof with de?nition of“[entrepreneurial]opportunity”1536%1324%2830% Empirical2335%9465%11756%
–Thereof in broader,mainstream/disciplinary journals926%3941%4841%
–Thereof with de?nition of“[entrepreneurial]opportunity”512%1719%2219% Total65100%145100%210100%–Thereof in broader,mainstream/disciplinary journals2234%6243%8440%
–Thereof with de?nition of“[entrepreneurial]opportunity”2031%3021%5024% Conceptual
–a)Explicit reference to“nexus”idea921%1020%1920%
–b)Formal propositions about direct actor effects1433%1325%2729%
–c)Formal propositions about direct“opportunity”effects614%510%1112%
–d)Both b and c37%24%55%
–e)Both b and c and actor?“opportunity”interaction37%24%55%
–f)Formal propositions about any“nexus effects”b614%816%1415%
–g)Explicit“nexus”contribution I:both a and e00%00%00%
–h)Explicit“nexus”contribution II:both a and f25%00%22% Empirical
–i)Explicit reference to“nexus”idea14%1415%1513%
–j)Formal hypotheses about direct actor effects1565%4750%6253%
–k)Formal hypotheses about direct“opportunity”effects29%1718%1916%
–l)Both j and k14%77%87%
–m)Both j and k and actor?“opportunity”interaction14%66%76%
–n)Formal hypotheses about any“nexus effects”b522%1516%2017%
–o)Explicit“nexus”contribution I:both i and m00%22%22%
–p)Explicit“nexus”contribution II:both i and n14%77%87%
–Survey(primary)1565%2728%4236%
–Archival29%4043%4236%
–Experiment(incl.conjoint)522%1314%1815%
–Qualitative case study14%1112%1210%
–Other00%33%33%
a Includes Short et al.(2010)68articles plus another5eligible articles from the same era,less8published prior to year2000.
b“Nexus effects”include actor?“opportunity”moderation or mediation(regardless of analysis approach)as well as actor effects on“opportunity characteristics”, but not actor effects on the identi?cation,recognition or evaluation of“opportunities”.
Others have independently added understanding of the evolving nature of“entrepreneurial opportunities”(e.g.,Ardichvili et al., 2003;Cornelissen and Clarke,2010;Dimov,2007a;2011;Wood and McKinley,2010).
All of this has contributed to the understanding of the journey from non-existence to existence of new economic activities. However,Table1(c to h)highlights just how limited the contribution to nexus theorizing is.Formal propositions about direct “opportunity”effects are offered by a total of11studies,and the proportion doing so is not increasing.A similar minority—14 studies—formally propose actor–“opportunity”interaction of any kind(see Table1,row f and note2).Only two of these papers attempt explicit contributions to nexus theory as indicated by citing the nexus idea.Both represent views of“opportunities”and actor–“opportunity”interaction that are quite far removed from the original framework(Sarason et al.,2006;Schindehutte and Morris,2009).
The empirical stream identi?es some characteristics of“opportunities”—e.g.,novelty,uniqueness,scope,and change—which together with entrepreneur characteristics may give shape to entrepreneurial action and outcomes(e.g.,Dahlqvist&Wiklund, 2011;Hmieleski and Baron,2008;Parker,2011;Shane,2001).However,there are hardly any signs of sub-streams evolving around particular“opportunity”characteristics with agreed-upon meaning and operationalizations.The stream also provides examples of nexus contributions,although this is the authors'explicit intention only in a minority of such cases(m–n vs.o–p).Employing the most generous criteria,we identify22papers that can be said to further insights into nexus issues,i.e.,actor–“opportunity”interplay in entrepreneurial processes.However,while many of those converge on examining“prior knowledge”on the actor side,there is little commonality across studies regarding the“opportunity”characteristics they investigate.Two of the22studies are qualitative and exploratory(Corner and Ho,2010;Shane,2000)and therefore not included in row(n)in Table1.Another two are archival (Barreto,2012a;Renko,2013),the former providing a rare example of a well-de?ned“opportunity space”in the context of observational data.Five are survey-based,four of which use dependent variables that gauge the performance of established?rms rather than new venture creation(Bradley et al.,2012;Dencker et al.,2009;Gruber et al.,2013;Hmieleski and Baron,2008).The exception is Dimov(2010).
Remarkably,13of the22“nexus”studies(57%)use experimental approaches(Choi and Shepherd,2004;Dimov,2007a;Drover et al.,2014;Grégoire,and Shepherd,2012;Haynie et al.,2009;Holland and Shepherd,2013;McKelvie et al.,2011;Mitchell and Shepherd,2010;Mullins and Forlani,2005;Shepherd et al.,2013;Welpe et al.,2011;Wood and Williams,2014;Wood et al., 2014).This is14and4times higher,respectively,than the prevalence of experimentation in entrepreneurship or“entrepreneurial opportunity”research overall(see Table1and Crook et al.,2010).This re?ects the method's strength for research on what makes
actors perceive something to be an opportunity.The experimental set of studies can also be lauded for predominantly using business practitioners as participants.This said,there are limitations to the approach and to how it has been applied so far.The dependent variable is typically an expression of attitude or preference,and with one exception (Holland and Shepherd,2013)it refers to early,pre-action aspects of the entrepreneurial process.
In all,our review clearly suggests that from a nexus perspective,the voluminous research on “entrepreneurial opportunities ”has made limited progress.This does not imply that the individual studies failed to reach their intended goals,but collectively they have only achieved limited contributions to conceptualizing and operationalizing characteristics of “opportunities ”,theorizing their direct and actor –contingent effects on action and outcomes in the venture creation process,or rigorously testing such effects.
4.Assumed requisites of a prospective,micro-level theory of an entrepreneurship nexus
A theory is a system of constructs in which the constructs are related to each other by propositions (Bacharach,1989).If the meaning of constructs is not clear,then relationships among constructs cannot be clear,either.Construct clarity is essential to the development of sound theory,effective communication,and the building of cumulative knowledge (Bacharach,1989;McKinley,2007;Miller,et al.,2013;Suddaby,2010).Therefore,each explanans and explanandum ,or antecedent and outcome,should have clearly de ?ned and consistent meaning,which is distinct from other constructs in the theory.
Assuming the entrepreneurial process is the journey from non-existence to existence of new economic activities,a prospective,micro-level theory of entrepreneurial processes can address a number of questions pertaining to identi ?cation ,evaluation ,initiation ,progress ,persistence ,and success .These are strong candidates for the role of explananda,or dependent variables.By success we mean the establishment of a new,viable economic activity.Relative performance of established ?rms lies outside the immediate realm of the theory (cf.Shane,2012;Shane and Venkataraman,2000;Venkataraman,1997).
The nexus framework focuses on two micro-level explanantia.We generalize Shane and Venkataraman's (2000)“individuals ”to “Actor ”,thus allowing this role to be held also by teams,a relay of champions,or organizations (cf.Table 2;de ?nitions 3,5,6).As the second nexus element they choose “opportunities ”.For now,we will use the label “Non-Actor ”for this component of the theory.Table 2
Examples of de ?nitions of “entrepreneurial opportunities ”.
De ?nition
Comment 1.None
Close to 80%of reviewed articles do not offer a de ?nition.2.[S]ituations in which new goods,services,raw materials,and organizing
processes can be introduced and sold at greater than their cost of
production (…)Entrepreneurial opportunities (…)require the discovery of
new means –ends relationships (Shane and Venkataraman,2000:220;cf.
Shane,2012:15)
Opportunity is external,objective and pre-exists discovery (but is unequally accessible to different actors).The de ?nition implies inherent favorability;for-pro ?t;innovation,and a “user pays ”revenue model.3.[A]set of environmental conditions that lead to the introduction of one or
more new products or services in the marketplace by an entrepreneur or by
an entrepreneurial team through either an existing venture or a newly
created one (Dutta and Crossan,2005,p.426)
Similar to (2).Explicitly broadens actor and organizational context.Note the deterministic “lead ”.4.Opportunity exists when competitive imperfections exist in product or
factor markets (Alvarez et al.,2013:302;cf.Alvarez and Barney,2010:559)
Seemingly similar to (2),but a “creation opportunity ”is the end product,not the starting point,of the entrepreneur's actions.Markets and opportunities are social constructions.5.[T]he chance for an individual (or a team)to offer some new value to
society,often by introducing innovative and novel products or services by
creating a nascent ?rm.These opportunities contain the possibility for
economic gain as well as the possibility for ?nancial loss for the
entrepreneur(s)pursuing the idea (Lee and Venkataraman,2006:110)
The de ?nition illustrates ambiguity/indecision as regards external/objective (“chance …to offer ”vs.“idea ”);innovativeness and organizational context (“often ”x and y),and inherent favorability (“chance …value ”vs.“gain …loss ”).6.[A]n idea or dream that is discovered or created by an entrepreneurial
entity and that is revealed through analysis over time to be potentially
lucrative (Short et al.,2010:55)
Illustrates ambiguity/indecision as regards what an opportunity is (create/discover a dream?),especially across time.Increasing objectivity and (known)favorability over time is implied.7.[T]he chance to introduce innovative (rather than imitative)goods,
services,or processes to an industry or economic marketplace (Gaglio,
2004:534)
Appears to refer to external conditions;explicitly limited to innovative endeavors.8.[A]n idea for an innovation that may have value after further investment
(Kornish and Ulrich,2011:107)
Also restricted to innovative endeavors,but clearly referring to subjective ideas.9.[P]rojected courses of action to introduce (and pro ?t from)new and/or
improved supply –demand combinations that seek to address market
failure problems (Grégoire et al.,2010b :117)
Action path focus;requires a degree of innovation;introduces intentionality as regards pro ?t and addressing market failure.10.[A]future situation that is both desirable and feasible,regardless of the
resources currently under the control of the entrepreneur (Wood and
McKinley,2010:68)
Taken literally,opportunity is neither a current situation nor an idea,but a future situation.Note that favorability (“feasible ”)is known.11.The progress (idea +action)along a continuum ranging from an initial
insight to a fully shaped idea about starting and operating a business.
(Dimov,2007a :720)
Focus on subjective ideas (like 8)but also includes action.The evolving,process nature is emphasized even more than in (6,9).12.[P]erceived as positive situations that are controllable (…)must represent
a desirable future state,involving growth or at least change;and the
individual must believe it is possible to reach that state (Gartner et al.,
2008:304)Similar to (10)but emphasizes controllability.Illustrates ambiguity or indecision as regards objective/subjective and current/future.
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Table3
Examples of within-work inconsistencies in the meaning of“opportunity”.
1.Opportunities are de?ned as objective,external situations and yet entrepreneurs can choose to sell their opportunity to another actor(Shane and
Venkataraman,2000:220vs.221,224).
2.Opportunities are situations that“allow outputs to be sold at more than their cost of production”yet four of eight cases so labeled did not generate pro?t
and one was not technologically feasible(Shane,2000:451vs.455).
3.Opportunities are de?ned as objective,external situations although later they are described as subjective ideas[that may evolve or be abandoned](Dutta
and Crossan,2005:426vs.436–8;Hmieleski and Baron,2008:285vs.286,291,regarding“discovery opportunities”).
4.New technologies are described as opportunities in themselves whereas in other instances that label is used for speci?c applications of said technologies
(Eckhardt and Shane,2010:49vs.61;Shane,2003:34vs.24;levels inconsistency).
5.An opportunity is a chance“to introduce”something but also remains an opportunity after it has been introduced,as long as it generates pro?t(Eckhardt
and Shane,2010:49vs.54;Shane and Venkataraman,2000:220vs.221;time[and/or level]inconsistency).
6.Opportunity is de?ned to mean the chance to introduce innovative(rather than imitative)goods,services,or processes and yet there are also“imitative
opportunities”(Gaglio,2004:434vs.435;Shane and Venkataraman,2000:220[“new means–ends frameworks”]vs.221;however,also see Shane,2012, on this issue).
7.Opportunity is a market imperfection and the authors assert it is not contingent on actual realization of economic wealth(Alvarez et al.,2013:302)yet
“creation opportunities”only exist after they are enacted in an iterative process of action and reaction(p.308).This begs the question what criterion other than the realization of economic wealth marks the existence of such opportunities/market imperfections.
8.A“creation opportunity”is de?ned as“a competitive imperfection in product or factor markets”created by the actor,yet the“opportunity”label is also
applied to an early stage,unproven idea(Alvarez et al.,2013,pp.302,308,310;cf.Alvarez and Barney,2007,different parts of p.15;Alvarez and Barney, 2013:155;time/essential properties inconsistency).Cf.also the expression“Enacted opportunities formed endogenously by entrepreneurs seeking to exploit them”as source of“competitive imperfections”(=opportunities)(Alvarez et al.,2013:305t1).What is it entrepreneurs are trying to exploit,when they start forming an“opportunity”?
9.In The Creation View“opportunities”is not pre-existing but created by the Actor,yet Actors are within this view portrayed as if they embraced the
Discovery View,because early in the process they ponder what“opportunities”they might“face”and whether they have the resources to“exploit”them (Alvarez et al.,2013:308).
10.More than one(own or adopted)de?nition is provided where the de?nitions do not agree on essential properties of an“opportunity”(Smith et al.,2009:
41vs.42;situation https://www.wendangku.net/doc/7b7679507.html,rmation;Casson and Wadeson,2007:298vs.285–6;favorability perceived vs.objective;opportunities existing independent of perception or not).
11.Opportunity is de?ned as“desirable”and“feasible”yet some are eventually abandoned because the entrepreneur no longer believes in them(Wood and
McKinley,2010:68vs.71,75;cf.DeTienne and Chandler,2007,feasible by de?nition pp.366vs.not required in operationalization,p.371)
12.Opportunity is de?ned as an idea for an innovation that may have value;however,there appears to have been no attempt to exclude from the empirical
study those ideas that fall at the low end of the distribution according to quasi-objective measures of value or originality(Kornish and Ulrich,2011:107vs.
111–112).
On the Actor side,the theory needs to assume that Actors exist and that they vary across time and cases on distinct characteristics which can help explain,e.g.,their action or inaction,and their success or lack thereof.Similarly,to perform its role as explanans,the Non-Actor needs to exist early,otherwise it cannot contribute to a decision to initiate(or not)the process.The Non-Actor also needs to have characteristics that are distinct from the Actor and from the explananda.Further,the theory needs to assume variance in these characteristics and that this variance can help explain variance in identi?cation,evaluation,initiation,persistence,progress and/or success.A core,nexus assumption is that the effects of the characteristics of the Non-Actor component are potentially contingent on characteristics of the Actor,and vice versa.
Finally,we hold that testability is a preferable characteristic.A conceptualization making instances of Non-Actor identi?able and their characteristics possible to operationalize is preferable to a conceptualization that makes testability problematic in these regards.
5.Limitations of extant conceptualizations for our current purposes
5.1.Three views of“opportunities”and the entrepreneurial process
Our literature review demonstrated that prior work has expressed varying ideas regarding the nature and role of the Non-Actor in entrepreneurial processes.Noting that a coarse classi?cation can never do justice to each individual work,we can with some expansion of earlier expositions(e.g.,Alvarez et al.,2013)broadly classify three different perspectives:the Discovery View,the Creation View,and the Evolving Idiosyncrasy View.As demonstrated below,none of these currently ful?lls the criteria outlined above for a prospective,micro level theory of the“entrepreneurship nexus”.This is because essential constructs are either missing,unclear,or problematically overlapping.This leads to further problems of specifying relationships and putting them to an empirical test.
The Discovery View is most clearly expressed in works by Shane and co-workers(e.g.,Eckhardt and Shane,2003;2010;2013; Shane,2000;2003;2012;Shane and Venkataraman,2000)and is at least partly and implicitly embraced also in laboratory research that presents presumed“opportunities”to participants.It is the origin of the nexus idea,and it is therefore not surprising that it ful?lls many of the criteria outlined above.Actors and“opportunities”are assumed to pre-date the entrepreneurial journey,have varying characteristics,and jointly shape the process and its outcomes.An“opportunity”is something objectively existing and favorable (Table2:2).However,neither the Actor nor the analyst can know ex ante whether what the Actor is(considering)Acting upon truly is an“opportunity”or not(Eckhardt and Shane,2003:339;Eckhardt and Shane,2010:54;cf.Dimov,2007a:724).This has dire consequences.First,the Non-Actor component conceptually overlaps the explanandum“success”.This is because“opportunity”is de?ned in such a way that competently exploited by a suitable Actor the outcome must be successful(Eckhardt and Shane,2010:
48).Therefore,the theoretically de ?ned Non-Actor cannot explain negative outcomes.If an Actor fails to act on what is objectively an “opportunity ”(for them),this cannot be explained by the characteristics of that “opportunity ”.The same goes for failure to bring the start-up process to completion.These negative outcomes must be due to faults on the Actor side,or to other factors not included in the model.This is at odds with the very heart of the nexus idea,which highlights the interplay of two,micro-level explanantia as well as uncertainty and the importance of allowing for failure (Eckhardt and Shane,2010;Shane,2012).
Second,the Discovery View currently lacks a construct to denote the contents of what the Actor is (considering)acting upon (Shane,2012:15–16).Alternatively,the “opportunity ”label is used —confusingly —both for the early,inherently uncertain Non-Actor entities and the more restrictive set of such entities that are theoretically assumed or empirically proven to be favorable (Table 3:1–3).Despite claims to the contrary (Eckhardt and Shane,2013),the contents of the early stage,subjective entity acted upon are not captured by the notion of “conjecture ”,which focuses on (positive)evaluation rather than substance (Eckhardt and Shane,2003:339).Further confusion surrounds the level at which objective,pre-existing “opportunity ”is de ?ned (Table 3:4).
Third,to reconcile the ideas of objective,Actor-independent existence on the one hand and the uncertainty and fallibility of the Non-Actors that Actors actually pursue on the other,proponents of the Discovery View sometimes explicitly treat “opportunities ”as unknown (Eckhardt and Shane,2010:50–54).However,this does not seem well aligned with insistence on the importance of mea-suring “opportunities ”and their effects (Shane,2012;Shane and Venkataraman,2000).Adding to their unknown status the criterion that they be Actor-independent makes operationalization and probability sampling of “opportunities ”as de ?ned in this view seem Table 4
Examples of “within-author ”drift in meaning of “opportunity ”across works/time.
Work
De ?nition Shane (2000:451) 1.Entrepreneurial opportunities are opportunities to bring into existence new goods,services,raw materials,and organizing methods that allow outputs to be sold at more than their cost of production.Shane and Venkataraman (2000:220)
2.[S]ituations in which new goods,services,raw materials,and organizing processes can be introduced and sold at greater than their cost of production.Eckhardt and Shane (2003:336[a +b +c]):Shane and Eckhardt
(2003:165[a +b]);Eckhardt and Shane (2013:161[a only])
3.a:[S]ituations in which new goods,services,raw materials,and organizing processes can be introduced through the formation of new means,ends,or means –ends relationships.(cont.b)These situations do not need to change the terms of economic exchange to be entrepreneurial opportunities,but only need to have the potential to alter the terms of economic exchange.(cont.c)In addition,unlike optimizing or satis ?cing decisions,in which the ends that the decision maker is trying to achieve and the means that the decision maker will employ are given,entrepreneurial decisions are creative decisions.That is,the entrepreneur constructs the means,the ends,or both.Shane (2003:18)
4.[A]situation in which a person can create a new means –ends framework for recombining resources that the entrepreneur believes will yield a pro ?t.Nicolaou,Shane,et al.(2009:109)
5.[Opportunity recognition is the identi ?cation of]a chance to combine resources in a way that might generate a pro ?t.Eckhardt and Shane (2010:49)
6.[S]ituations in which new goods,services,raw materials,markets and organizing processes can be introduced for pro ?t.[The work also states that “Opportunities are economic circumstances where if the correct goods or service were to be properly organized and offered for sale that the result would be pro ?table ”(p.48)].Shane (2012:15)
7.[S]ituations in which it is possible to recombine resources in a way that generates a pro ?t.(The work also repeats the Shane and Venkataraman,2000,de ?nition).Eckhardt and Shane (2013:161)
8.Unexploited pro ?table combinations of what is technologically feasible and market feasible.Exist independent of human perception.[the work also repeats the ?rst part of the de ?nition given by Eckhardt and Shane (2003a)].Grégoire &Shepherd (2012:756)
9.[S]ituations that are relevant for introducing new or improved products,services,or ways of doing business to better serve the needs of consumers in one or more market(s)(cf.same authors Table 1,def.(9);however ,these authors re-use the above de ?nition also in Grégoire and Shepherd,in press ).Wood et al.(2014:254)
10.Opportunities concern the introduction of new and/or improved means of supply (e.g.,new products,services,or ways of doing business)to better serve the needs of consumers in one or more markets.Wood and Williams (2014:575;578)
11.[S]ubjective interpretations about a set of circumstances and what could be done in these situations (…)[which]involve the introduction of new means –ends relationships (cf.same author above and Table 1,def.10).Drover,Wood &Payne (2014:839)
12.[S]ituations in which “new goods,services,raw materials,and organizing methods can be introduced and sold at greater than their cost of production ”(Casson,2000,p.220).By de ?nition then,opportunities must hold pro ?t potential (cf.same author above and Table 1,def.10).Dimov (2003:412)
13.[A]perceived possibility of economic gain (cf.same author Table 1,def.7).Sarasvathy,Dew,Velamuri,&Venkataraman (2003:143)14.New idea/s or invention/s that may or may not lead to the achievement of one or
more economic ends that become possible through those ideas or inventions (and)
beliefs about things favorable to the achievement of possible valuable ends;and
actions that generate and implement those ends through speci ?c (imagined)new
economic artifacts.(cf.same author Table 1,def.2and 5).
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impossible.This has raised concerns that propositions within this view may be inoperable and/or non-testable(Alvarez and Barney, 2013;Dimov,2011).5
The Creation View is mainly associated with Alvarez and co-workers(e.g.,Alvarez and Barney,2007;Alvarez et al.,2013),although others have put forward related arguments more or less independently(e.g.,Ardichvili et al.,2003;Cornelissen and Clarke,2010; Wood and McKinley,2010).This perspective is cast as an alternative or complement to the Discovery View.However,although Actors and“opportunities”remain on center stage,it was not developed with an explicit aim to theorize how variance in Actors and Non-Actor components jointly shape entrepreneurial processes.It is therefore not surprising that it lacks elements needed for our current purposes.
Like the Discovery View,the Creation view de?nes“opportunity”in a rather external-objectivistic manner as a market imperfection,although it is emphasized that“opportunities”can be socially constructed and emerge only thanks to Actor's actions (Table2:4).The created“opportunity”is the successful end point of the entrepreneurial journey;hence existence or characteristics of“opportunities”under this view cannot explain why the Actor took action in the?rst place,and giving them a role in explaining success would be tautological.Similar to the Discovery View,the Creation View lacks a well-developed concept for the uncertain and sometimes rightfully abandoned Non-Actor worked on at early stages of the process(cf.Klein,2008:181).There is cursory reference to“initial beliefs about opportunities”(e.g.,Alvarez and Barney,2007:15;Alvarez et al.,2013:308)mixed with recurring instances of also applying the“opportunity”label to such early,subjective,and uncertain beliefs(Table3:8).Moreover,there may be a more fundamental lack of clarity of what the discovery-creation distinction is under the Creation View,as it is alternately cast as a matter of theoretical assumptions(Alvarez and Barney,2007:17);objectively different states of the“real world”(Alvarez and Barney,2007:14n3),and different sets of action patterns in venture creation processes(Alvarez et al.,2013).
What we label the Evolving Idiosyncrasy View,most clearly expressed by Dimov(2011:64–66)and Sarason et al.(2006;2010), has a similar but slightly different take on the evolving,Actor–contingent nature of the entrepreneurial process.“Opportunity”is predominantly used to denote a subjective and unproven idea.This idea exists early in the process,but can change considerably during its course,and take on increasing“objecti?cation”over time(Wood and McKinley,2010).This makes the perspective reminis-cent of Sarasvathy's(2001)description of effectual processes,although her theorizing does not emphasize the“opportunity”construct.
Under the Evolving Idiosyncrasy View the uniqueness of each“opportunity”is emphasized,and the argument insists on the inseparability of the“opportunity”from the entrepreneur.Although this highlights the interplay between Actor and Non-Actor,in line with the nexus idea,the perspective explicitly denies that characteristics of the“opportunity”can be meaningfully discussed without reference to a particular actor.This is in direct opposition to viewing Actor and Non-Actor as separate entities whose characteristics may have both direct and interactive effects.Thus,the Evolving Idiosyncrasy View does not invite theorizing about—or empirical assessment of—abstracted characteristics of the Non-Actor component nor their in?uence on action and outcomes across Actor+Non-Actor dyads.
5.2.Favorability as an obstacle to construct clarity
Our review and analysis above show that the meaning of“entrepreneurial opportunities”is unclear(cf.Foss and Klein,2012:74; Hansen et al.,2011;McMullen et al.,2007:273).Further,this holds not only across but also within works and“views”.A major reason why authors have not attained clarity is that“opportunity”necessarily carries a connotation of favorability.It thus comprises both contents and an evaluation of the contents.Authoritative lexical de?nitions suggest“A time,juncture,condition of things favorable to an end or purpose,or admitting of something being done or effected”or“A set of circumstances that makes it possible to do some-thing”(cited from Grégoire and Shepherd,in press;Sarasvathy et al.,2003).The assumed favorability shows also in the de?nitions in Table2.When the“opportunity”is occasionally described as“false”,“illusory”,“unfruitful”or as bringing losses to the entrepreneur,it is only because someone has changed their mind or failed to take the right action in relation to the“opportunity”.If a formal de?nition were worded so that no favorability of any kind is implied,there can be no reason to keep the label“opportunity”.
The locus of the favorability may vary.It may be(1)stipulated or assumed by the theorist,(2)proven through the eventual outcome,or(3)perceived by(potential)entrepreneurs or their stakeholders.The Discovery View builds on(1)but due to the elusive nature of empirical“opportunities”its proponents also lean on(2)(Eckhardt and Shane,2003:339)and occasionally drift into (3)(Table4:4).The Creation View combines(1)and(2)by theoretically de?ning“opportunities”as market imperfections created by the Actor,but its proponents also slide into(3)(Table3:8).The Evolving Idiosyncrasy View applies(3)as the main view,and may or may not consistently stick to it.Either way,it is doubtful whether the theorist ever has reason to accept this criterion for using the“opportunity”label for subjective ideas,including those that are all but delusional,rejected by other stakeholders,and lead to non-action,eventual abandonment,or failure(cf.Dimov,2007a:720).
A greater problem is that even when there is agreement across views,or consistency within a particular view,the favorability connotation creates conceptual problems in relation to the scope conditions that Suddaby(2010)argues need to be speci?ed in order to reach construct clarity:space;time;level,and values.6When a new technology(or regulatory,demographic or social change)
5Interpreting“objective”as pertaining only to physical existence and applying a very low threshold for objective favorability(e.g.,above-zero probability of success; Shane,2012),there are a few empirical contexts where“objective,pre-existing opportunity”may be a reasonable approximation.This is when the“opportunity”es-sentially consists of a site and its characteristics,such as well-de?ned geographical markets(Barreto,2012a),real estate development sites(Fiet,2007),or potential mining sites(Bakker et al.,2014).
6Suddaby(2010)regards level as an aspect of space.
is introduced,this may be good or bad for the economy as a whole,and of varying bene?t across regions,industries,?rms, individuals,and particular new venture attempts involving different applications of the focal technology.Where does the “opportunity”label apply?An idea for a new type of business venture may be favorable or not depending on who pursues it as well as when and where it is converted into a new market entry attempt.Even those who accept the existence of“objective opportunity”concede that the opportunity may no longer exist by the time the Actor is ready to launch(Eckhardt and Shane, 2010:50).Does an Actor's choice to give up a start-up attempt mean that the“opportunity”no longer exists;that it never did,or that the“opportunity”is now available for someone else?Combining level,time and space,assume a number of entrepreneurs respond to the same regulatory change by trying to start the same type of businesses in the same and different locations at different points in time,and that some of them succeed and others fail.Which of these cases represented “opportunities”,and which did not(cf.Barreto,2012a)?
It is questions like these that authors wrestle with and stumble on when theorizing about“opportunities”(see Tables3and4).As a result,nowhere in the reviewed literature have we found use of the“opportunity”construct that approaches satisfaction of Suddaby's (2010)criteria for construct clarity.But the problem here lies more with the notion of“opportunity”itself than any shortcomings of its users.Our conclusion is that“opportunity”is not a suitable construct for prospective,micro-level theories of entrepreneurial processes.A second conclusion is that micro-level favorability should not be built into either the Actor or Non-Actor constructs of such a theory.Thirdly,to capture and extend the ideas that have previously been discussed under the“opportunity”label,more than one construct will be needed.
6.An alternative conceptualization
Using Suddaby's(2010)criteria for construct clarity as inspiration we outline in Table5the three constructs we suggest be used instead of“entrepreneurial opportunity”,with further elaboration below.The purpose of this exercise is to ful?ll the previously outlined criteria of construct clarity,early existence,explanatory variance in characteristics,and testability,while retaining widely accepted notions that external conditions are important,and that Actors act on the basis of subjective cognitions.
Table5
Summary of constructs to represent“Entrepreneurial Opportunity”.
External Enabler New Venture Idea Opportunity Con?dence
De?nition A single,distinct,external circumstance,
which has the potential of playing an
essential role in eliciting and/or enabling a
variety of entrepreneurial endeavors by
several(potential)actors An“imagined future venture”;i.e.,an
imaginary combination of product/service
offering,markets,and means of bringing
the offering into existence
The result of an actor's evaluation of a
stimulus(External Enabler or New Venture
Idea)as a basis for the creation of new
economic activity
Examples of what it is Changes to technology,demography,
culture,human needs and wants;
institutional framework conditions,
macro-economic conditions,and the
natural environment
The contents of“imagined future ventures”
Any of the eight conceived applications of
3DP?technology described by Shane
(2000)
An assessment that:
“Because of EE x,this is a good/bad time for
people to introduce new ventures”
“I/someone could(not)make good money
from using technology X in manner Z to
serve market Y”
Examples of what it is not The complete set of external circumstances
that in?uence the fate of a particular
venture
Necessarily perceived or acted upon
Generally favorable for the economy at
large,or for all types of ventures and actors
A manifest venture or business model
An idea for increased ef?ciency of existing
operations
Necessarily innovative,complete or well-
articulated;acted upon;successful,or
perceived to represent“an opportunity”by
anyone or for anyone
Identi?cation of New Venture Ideas
The contents of External Enablers or New
Venture Ideas
Entrepreneurial self-ef?cacy
Necessarily even remotely correct
Necessarily referring to self
Favorability Assumed on aggregate level for some
activities(unknown which)but not
necessarily overall.
Micro-level favorability is selective,
interdependent,subjective,uncertain,and
only revealed through empirical analysis Not built into construct—revealed through
empirical analysis
Variable across ideas,actors and contexts
Degree of favorability—from low to
high—is the essence of the construct
Subjective
Ipsative
Of varying magnitude and uncertainty
Level Aggregate;pertaining to multiple potential
activities and actors Venture(through one or more cognizing
agents)
The evaluator:individual
The evaluated:micro to macro
Time Particular EEs are temporary;some EEs are
always present in a disequilibrium economy Existing when cognized;in operation for
the duration of the venture creation
process;changeable
Momentary
Periodically reassessed
Lineage Economics
Sociology
Social psychology
Organization/Management
Prior“Entrepreneurial Opportunities”
research Prior“Entrepreneurial Opportunities”
research
Cognitive and Social psychology
Psychology
Prior“Entrepreneurial Opportunities”
research
Values/assumptions External Enablers are good if conducive to
new economic activities that improve the
economy at large New Venture Ideas are good if conducive
to venture level success and/or
improvement of the economy at large
Con?dence may or may not be well
founded,leading to positive or negative
effects for focal Actor and others
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6.1.External Enablers
The idea of objectively favorable,pre-existing and actor-independent“opportunities”on the micro-level has triggered philosophical and logical opposition,which has arguably led researchers to either reject the nexus idea or dissuaded them from applying it in empirical research.At the same time there is widespread agreement across proponents of different views that changes in,e.g.,technology,demographics,regulatory frameworks and the natural environment trigger new venturing attempts,some of which will prove successful(Alvarez and Barney,2013;Davidsson,2003;Dimov,2011;Shane,2012).Prior research has also demonstrated that focusing on particular aspects of environmental change can illuminate our understanding of how new economic activities emerge(e.g.,Barreto,2012a;Grégoire,and Shepherd,2012;Hiatt et al.,2009;Shane,2000;2004;Sine and Lee,2009).
External Enabler is our label for such single,distinct,external circumstances,which—by affecting supply,demand,costs,prices or payoff structures—can play an essential role in eliciting and/or enabling a variety of venture development attempts by several Actors. It is thus an aggregate level construct.The existence and enabling capacity of External Enablers is theoretically assumed,in alignment with an underlying assumption of a disequilibrium economy(Arend,2014;Shane and Venkataraman,2000).This also accords with historical experience;in each long enough time period environmental changes occur.Some Actors try to exploit these changes,and a number of them attain success in doing so.
Importantly,however,External Enablers(EE)are not favorable for all purposes and the economic effect of any given EE is not necessarily positive overall.On the micro-level,what is an enabler of one venture may be the undoing of another.Consequently, natural disasters or terrorist attacks can be External Enablers for ventures initiated in response to these events.In other words,the favorability of any EE is selective,subjective,interdependent,and uncertain.By selective we mean that their favorability is contingent on space,time,and application area(e.g.,industry;product;geographical area;time of the event of the EE and of the attempt to exploit it).The favorability is subjective in the sense that it is contingent on the characteristics of the Actor.
Further,the favorability of an EE may be interdependent with other external conditions,as when the unleashing of the potential in new technology is contingent on regulatory change(see,e.g.,Navis and Glynn,2010).Finally,due to competitive action and other unknown future changes,the favorability of an EE for any particular purpose is fundamentally uncertain ex ante.
External Enablers are temporary.Over time,the actions of other entrepreneurs and additional changes within the economic system will erode the existence of an EE or its enabling capacity for particular types of new economic activity.
Being abstract-and environment-related,the construct has its relevant lineage from economics,sociology and social psychology. Therefore,these disciplines would be the most likely sources of extant theories,auxiliary constructs,and validated measures.The construct also shares some characteristics with Strategic Issues in management research(Barreto,2012b;Gartner et al.,2008), although we do not assume the existence of an organization or established economic activity(cf.Shane,2012:11).Further,not all Strategic Issues require entrepreneurial responses.
By including External Enablers we wish to acknowledge environmental circumstances,whose importance is insisted on in the Discovery View,and which may be regarded as under emphasized by others(see.e.g.,Eckhardt and Shane,2013;Shane,2012). However,in line with arguments from the Creation View(e.g.,Alvarez and Barney,2007)we also acknowledge that Actors themselves can have some in?uence on some External Enablers and occasionally have a major role in them,as when entrepreneurial Actors are also the inventors behind new technology or successfully lobby for the regulatory change they subsequently try to exploit.
6.2.New Venture Ideas
Our second construct,New Venture Ideas,stands for“imagined future ventures”(cf.Cornelissen and Clarke,2010;Klein,2008), where“new venture”denotes a distinct economic(i.e.,resource-transforming)activity offering goods and/or services to customers or other bene?ciaries.Thus,New Venture Ideas(NVI)are imaginary combinations of product/service offerings;potential markets or users,and means of bringing these offerings into existence.They are the contents(but not the favorability)of what others may have called“opportunity recognition”,“opportunity identi?cation”or“(entrepreneurial)discovery”.We use the label“New Venture Idea”to indicate inclusion of ideas that guide the creation of new corporate and social ventures.The intended new activity needs not be innovative(see Amason et al.,2006,on newness vs.novelty)but it must aim at introducing to potential users something not previously offered by the same actor,rather than optimizing an on-going activity(cf.Shane and Venkataraman,2000:220).
New Venture Ideas are cognitive and non-material.They may to a varying extent re?ect the Actors'interpretation of identi?able External Enablers.Further,they represent what an Actor might be aiming to create,rather than denoting the gradually materializing venture itself.However,the cognitive nature of ideas does not make them completely inseparable from a particular individual.A well-articulated NVI can be shared within a team or transferred between successive champions.It can be codi?ed and communicated to other individuals,such as potential investors and customers.Different individuals can independently conceive of NVIs with essentially the same characteristics.An experimenter can present NVIs with varying characteristics to participants to test their reactions.An individual entrepreneur can conceive of and act upon a variety of NVIs with varying success.All this suggests that characteristics of NVIs can be meaningfully conceptualized separately from a particular Actor(cf.Katz and Gartner,1988;Shane,2012).It also suggests that despite its cognitive nature the New Venture Idea construct is best attributed to the level of the(emerging)venture(Davidsson and Wiklund,2001).
Importantly,NVIs are not inherently favorable or perceived to be so.They can be good or bad;their subjective or objective favorability is what the effects of their characteristics on explananda are supposed to show.Individuals can conceive of an NVI and then decide not to act because they(correctly or incorrectly)conclude it is not worth their while,and different individuals contemplating the same NVI may assess them differently.This shows that identi?cation or recognition of New Venture Ideas does
not require positive evaluation .It also underlines that separating the two is essential (see Opportunity Con ?dence below).In terms of time,an NVI exists —albeit initially often in rudimentary and malleable form (cf.Sarasvathy,2001)—as soon as someone cognizes it.It is in operation from the moment the entrepreneur starts to act on it until the attempt is either given up,or the new economic activity has been established in the market.Conversely,there can be no new venture creation process before there is an NVI.The cognitions that give direction to hobbyists'actions to solve their own problems are not NVIs before they see their solution as the potential basis for a business.
Aspects of our notion of New Venture Idea appear under the “entrepreneurial opportunity ”label in prior literature,although this is not always in line with the authors'stated de ?nition (cf.Table 3).Similar ideas also appear under other labels (e.g.,[new][venture]idea;opportunity idea;business idea/concept;entrepreneurial idea/concept).This use typically occurs without conceptual elabora-tion and often interchangeably with “opportunity ”.In some earlier works,[New][Venture]Idea is the main construct (e.g.,Brush et al.,2001;Foo et al.,2005;Klofsten,2005),yet again with little conceptual elaboration (Hill and Birkinshaw's,2010,discussion of sets of ideas being an exception;cf.Gruber et al.,2013).We have not found under any label a well-developed construct which corre-sponds to our notion of New Venture Idea,and which clearly distinguishes between the contents and the evaluation of what is being cognized.
6.3.Opportunity Con ?dence
Our third construct has an important supplementary role.Opportunity Con ?dence (OC)refers exclusively to an Actor's evaluation —from negative to positive —of a stimulus that may be relevant to the creation of new economic activity.It denotes not what the Actor sees but their evaluation of it.It represents the only phenomenon where the notion of “opportunity ”is justi ?ed in a prospective theory:Actors take action or not depending on whether they are con ?dent that what they “see ”is an opportunity.
The term was introduced by Dimov (2010),although our de ?nition (see Table 5)deviates slightly from his,or at least from his operationalization.Prior literature has also used “[opportunity]evaluation/belief/conjecture ”(Autio et al.,2013;Eckhardt and Shane,2003;Grégoire et al.,2010b;Shepherd et al.,2007)in a similar manner.Consequently,our intention is not to introduce an en-tirely new idea.Instead,we aim for clari ?cation by sharpening and elaborating on the construct,and by eliminating this dimension from our main constructs:External Enablers and New Venture Ideas.
Degree of favorability is what the OC construct is all about.The favorability is subjective as in subject-speci ?c;because of knowl-edge –,resource –and opportunity –cost differences across Actors,they may correctly assign varying attractiveness to identical stimuli (McMullen and Shepherd,2006;Shane,2000).Opportunity Con ?dence is also subjective in a second sense,due to Actors'tendency to under-or over-estimate what is possible for them.This is what Frey and Heggli (1989)call ipsative .This also implies that OC may be mistaken and have little to do with the true state of External Enablers or the success chances of New Venture Ideas.
Opportunity Con ?dence is an individual level,perceptual construct,although it can emerge from social interaction (Dimov,2007a;Gemmel et al.,2011)and be shared within a team (cf.Foss and Klein,2012:79).Separating this individual level perception from the venture-and aggregate level stimuli to be evaluated makes it easier to account for different stakeholders holding varying levels of OC with regards to the same External Enabler or New Venture Idea.The level of the evaluated entity may vary from micro (one's own New Venture Idea)to macro (e.g.,the favorability of an External Enabler for business start-ups in general).Importantly,the evaluated en-tity is not the self,which is instead captured by the notion of entrepreneurial self-ef ?cacy (Chen et al.,1998).If an Actor loses heart and gives up somewhere in the process,this may be because they no longer believe in the viability of their New Venture Idea.Alternatively,they no longer believe they are the right person to exploit what they still see as a viable idea.This is an important and neglected con-ceptual distinction,which can arguably be managed by assessing self-ef ?cacy separately,and considering McMullen and Shepherd's (2006)?rst-vs.third-person contrast when assessing OC.
Subjective,perceptual,and individual-level,the construct has its most relevant lineage from psychology and its application in prior research on opportunity perception and evaluation.Along the time dimension,OC is momentary in the sense that the evaluation is made at and is valid for a particular point in time.Over an entrepreneurial process the OC may vary,even if its object remains un-changed.Allowing this independent evolution of contents and evaluation over the process is an additional advantage of conceptually separating the two.
In summary,Opportunity Con ?dence —ranging from low to high —refers to individuals'evaluation of External Enablers and/or New Venture Ideas.It is essential to conceptualize this evaluation separately in order to eliminate innate favorability from the other con-structs;let different stakeholders'evaluations vary for the same stimulus,and to allow contents and evaluation of the stimulus to vary independently of each other over time.
Fig.1Illustrates how the three constructs are related.The ?ve individuals may be potential entrepreneurs (Actors)or other stake-holders.Two of them,A and B,contemplate the same External Enabler,e.g.,a new technology or a socio-demographic shift,but arrive at very different levels of Opportunity Con ?dence in relation to it.This could be due to differences in prior knowledge or dispositional optimism.Individuals C and D both evaluate the same New Venture Idea and do so at the same point in time.C discards the idea while D thinks it is excellent,again due to some kind of personal differences.Inspired by the idea,D acts on it or at least ?nds reason to assess it again at a later point in time.The second evaluation is more lukewarm,presumably because of learning more about the qualities of the idea.The arrow from External Enabler to New Venture Idea is dashed because the idea may or may not have a clear basis in an External Enabler.Shane (2000)eight applications of 3DP technology are examples of the former,while the ideas behind many imita-tive start-ups in stable industries exemplify the latter.Individual E evaluates two different New Venture Ideas (at the same point in time)and arrives at different levels of con ?dence that they represent opportunities,presumably due to differences in the character-istics of the ideas themselves.Hence,E would be more likely to act,or recommend action,on NVI#2than on NVI#1.
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7.A revised framework for developing and testing entrepreneurship nexus theory
Our goal in this article is to provide a more workable framework,promoting testable theory for the micro-level study of how new economic activities and organizations emerge.In so doing,we put particular emphasis on the nexus idea and the role of the Non-Actor,i.e.,the contents of “that,on which Actors [might]act ”.For this purpose we represent the various ideas previously labeled “entrepreneurial opportunity ”by three constructs:External Enablers,New Venture Ideas,and Opportunity Con ?dence.We also suggest expanding Shane and Venkataraman (2000)emphasis on “individuals ”to “Actors ”.Further,we heed calls to highlight entrepreneurial Action (Dimov,2011;Klein,2008;McMullen and Dimov,2013;McMullen and Shepherd,2006;Venkataraman et al.,2012)and Outcomes (Davidsson,2003;Zahra and Dess,2001),which can also be seen as one of several ways in which we try to increase explicit attention to process issues within the framework.The delineation between Action and Outcomes is not crucial for our current purposes.We have previously suggested initiation ,progress ,persistence ,and success as explananda.In addition,Action can be alternatively construed as action path such as mode-of-exploitation (Shane and Venkataraman,2000)or activity pattern ,referring to such things as the intensity and sequence of different (types of)actions over time (Lichtenstein et al.,2007;Shane and Delmar,2004).
To maintain focus we will not elaborate on the precise meaning of,or inter-relationships among,these latter constructs.The same goes for Actor characteristics and their direct effects,as well as environmental contingencies other than as represented by the External Enablers.These delimitations do not mean we necessarily consider these de-emphasized factors to be less interest-ing or important.Further,we wish to emphasize that what we are offering is not a fully developed theory but a framework within which such theory can be developed and tested.In Sections 3to 6we have dealt with construct clarity for a particularly problematic part of the framework.Below we add some further ideas on research questions,the structure of relationships,and suitable empirical approaches.
7.1.The Actor ?New Venture Idea nexus
A signi ?cant share of the extant literature on “entrepreneurial opportunities ”associates that construct —conceptually and/or empirically —with subjective ideas about potential,future ventures (cf.Table 2,de ?nitions 5,6,8,11).Frequently,this does not appear to be a deliberate,consistently upheld or preferred choice but rather a practical,second-best solution.In contrast,we argue that New Venture Ideas should be embraced as the main alternative.New Venture Ideas appear early and pertain to all new venture creation processes.Their label is not contingent on Actor,time,or outcome,and the variances of their characteristics are not subject to any theoretical range restrictions.New Venture Ideas can be of any quality and they come with no assumptions regarding Actor evaluations or eventual outcomes.Further,it is a notion that should be compatible with a multitude of philosophical positions,and with “process theory ”as well as “variance theory ”(van de Ven,2007).
This said,at least three arguments against using subjective ideas in a nexus approach can be found in the literature.First,arguing for the Discovery View,Shane (2012:16)emphatically argues that short of objective,actor-independent “entrepreneurial opportunities ”there is no meaningful nexus because both parts of it are functions of the Actor.Second,the Evolving
Idiosyncrasy
Fig.1.External Enablers,New Venture Ideas,and Opportunity Con ?dence.
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View suggests that the entrepreneur and the “opportunity ”(usually referring to a subjective idea)are so intertwined that they cannot be meaningfully separated (Dimov,2011;Sarason et al.,2006,2010).Third,there is the suggestion that the solution to the elusiveness of “opportunities ”is not to put subjective ideas in their place but to increase the focus on actions in the entrepreneurial process (Dimov,2011;Klein,2008).
As regards Actor-dependence,real world entrepreneurs select which “opportunities ”(according to the Discovery View)they act on.Hence,Actor-dependence and the endogeneity problems it might bring (Hamilton and Nickerson,2003)pertain to all nexus research using observational data.Only experimental designs can fully separate the two nexus elements,and this they can do regardless of whether the experimenter-manipulated Non-Actor component is a set of external conditions or New Venture Ideas.Further,research on habitual entrepreneurs (Ucbasaran et al.,2006)demonstrates that the same individuals pursue different New Venture Ideas with varying results.Arguably,this outcome variance is largely due to differences in the quality of the New Venture Ideas and their ?t with the Actors.The moderate rate of completion of nascent venture processes (Parker and Belghitar,2006)also suggests there is considerable variance in New Venture Idea quality in observational data.Hence,even when New Venture Ideas do not have Actor-Independent existence,they can have conceptually meaningful characteristics that can be assessed and compared across ventures.These characteristics seem to have considerable variance and may prove to have probabilistic effects that can be meaningfully construed as,at least in part,Actor-independent.
Regarding the third objection,Actors act on something,and the ef ?cacy of particular actions is likely to be contingent on the nature of the imagined new venture the Actor is trying to establish (Alvarez et al.,2013;Eckhardt and Shane,2010).An increased emphasis on action does therefore not eliminate the need for investigation of New Venture Ideas.For these reasons,we maintain that nexus theorizing based on New Venture Ideas has considerable potential.
7.1.1.Theoretical development
A major mission for future research is to identify,conceptualize and operationalize the salient characteristics of New Venture Ideas.This is a very considerable task,yet an important and potentially fruitful one.For example,psychology has the “Big Five ”personality characteristics (John and Srivastava,1999)and innovation research has distilled ?ve generic innovation attributes which affect their diffusion speed (Rogers,1995).By the same token,it might serve entrepreneurship research well to develop a manageable set of well-de ?ned and -operationalized New Venture Idea characteristics.
This work does not start completely from scratch.Our review hinted at some potentially salient characteristics (see also Baron and Ensley,2006).However,only novelty (innovation)comes with a rich conceptual background (e.g.,Gatignon et al.,2002;Rogers,1995;Schumpeter,1934;Utterback and Abernathy,1975)and even there,work on operationalizations appropriate for the emergent stage has only recently begun (Dahlqvist &Wiklund,2011;Hill and Birkinshaw,2010).Further exploration into risk ,uncertainty and ambiguity and similar distinctions (Alvarez and Barney,2007;Sarasvathy et al.,2003)might prove useful,although this requires careful consideration of what can justi ?ably be conceptualized as characteristics of the idea rather than the Actor or the environment.Similarly,aspects of McMullen and Shepherd's (2006)distinction between ?rst-and third-person “opportunities ”can be addressed in terms of the New Venture Idea's degree of relatedness to its founders'knowledge and resource endowments (Haynie et al.,2009)as long as the theorist observes that this moves the nexus mechanism into the construct rather than being represented as interaction between constructs.
Research needs to allow for New Venture Ideas being only vaguely formulated at early stages,and sometimes subject to substantial change (cf.Sarasvathy,2001;Smith et al.,2009).This can possibly be achieved by including,e.g.,clarity ,completeness ,and change as New Venture Idea characteristics.Readiness (Douglas and Shepherd,2002)or preparedness for immediate market implementation would re ?ect aspects of discovery vs.creation,and the range from the simplest arbitrage (Kirzner,1973)to attempted realization of what is thought technically and commercially impossible (e.g.,Shane's,2012,“Leo Air ”).
In the interest of parsimony several of the above notions may eventually be reduced to sub-dimensions in a suf ?ciently complete and broadly applicable list of salient super-constructs representing attributes of New Venture Ideas;something like the Big Five.Moreover,as a list is not theory (Sutton and Staw,1995)the next challenge is to work out the theoretical mechanisms and to subject these ideas to empirical testing.This is depicted in Fig.2.We should emphasize at this point that the applicability of the three constructs developed in Section 5is broader than the “boxes and arrows ”framing of this ?gure,and likely to be useful also for “process theory ”(McMullen and Dimov,2013;van de Ven,2007).
The merging arrows in Fig.2(which represent direct as well as interactive effects)re ?ect the research question “How do characteristics of Actors and New Ventures Ideas independently and interactively in ?uence new venture creation processes?”,where the latter stands for Opportunity Con ?dence,Action,and Outcomes.Theorizing and testing the role of characteristics of New Venture Ideas for different aspects and stages of the venture creation process is a major task for future research.This is particularly true for Action and Outcomes at later stages of the process,which our review demonstrated have received only cursory attention in prior research.
A process perspective on venture creation calls for consideration of feedback loops.In Fig.2this is represented,?rstly,by the feedback arrow from Action/Outcomes to Opportunity Con ?dence.Contacts with potential customers and resource providers,as well as intermediate Outcomes,may make Actors adjust their assessment of the favorability of their New Venture Idea (cf.Dimov,2010;McMullen and Shepherd,2006,on “doubt ”).Theorizing and testing this dynamic from a nexus perspective is another important task for future research.There is reason to suspect that explicit consideration of variation in Opportunity Con ?dence over time may reconcile limited or mixed support for theorized effects of other factors on Outcomes in prior research (Dimov,2010).Second,New Venture Ideas being incomplete and malleable at early stages makes it unlikely that their early-stage characteristics can accurately explain venture creation Outcomes at a much later time.This highlights the need for multi-stage theorizing.The research question 687
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Fig.2.The Actor—New Venture Idea Nexus.
implied by the dashed feedback arrow at the bottom of Fig.2is“How and why do Actions and(intermediate)Outcomes in the new venture creation process lead to changes in the New Venture Idea?”whereas backward-and forward-pointing arrows combined suggest interesting possibilities in terms of learning and excessive tinkering.Although this theme has appeared in prior work there is certainly room for further development of abstracted,testable theory pertaining to these questions.
7.1.2.Empirical development
External Enablers may serve as an excellent,heterogeneity-reducing context for studies of the Actor?New Venture Idea nexus,as indicated by the dashed envelope in Fig.2(see,e.g.,Barreto,2012a;Shane,2000).Further,regardless of speci?c empirical approach, our framework calls for longitudinal designs undertaking repeated assessment of New Venture Idea characteristics and Opportunity Con?dence.Limitations of archival data sets(making the trend in Table2dubious)include that Opportunity Con?dence can usually only be inferred from Action and that they are unlikely to provide satisfactory detail on New Venture Idea characteristics.In one rare case when it does(Shane,2001)information on the Actor is lacking.This said,longitudinal survey studies like the Panel Study of Entrepreneurial Dynamics have developed a methodology through which the Actor?New Venture Idea nexus can be investigated in large-scale,prospective,and process-oriented studies on the micro level.Future studies of this nature could collect rich,time-varying data on both parts of the nexus(and on Opportunity Con?dence),utilizing the versatility of survey-based data collection. Challenges for the future include?nding ways to apply the approach to more homogeneous and theoretically suitable samples (Davidsson and Gordon,2012)and to extend it into the study of new internal ventures(Davidsson,2003).
Experimental and simulation-based studies can completely eliminate selection bias and range restriction pertaining to New Venture Ideas.They can systematically examine what type of New Venture Ideas appeal to and?t with what type of Actors (e.g.,novice vs.expert;solo entrepreneurs vs.teams;founders vs.investors;independent start-ups vs.corporate venturing)using any range of variation in New Venture Idea characteristics that the investigators deem theoretically motivated.Further,our frame-work provides guidance for the design of future laboratory research where prior work has often failed to make critical distinctions. First,it clari?es that“Which Actors are most likely to identify New Venture Ideas?”and“Which Actors become more con?dent that a given New Venture Idea represents an opportunity?”are separate questions which are likely to have different answers.Second,it forces experimenters to think twice about portraying,e.g.,the probability and magnitude of future?nancial outcomes as contents of the Non-Actor part of the nexus.In our framework,these would re?ect Actor inferences,presumably from more substantive attributes of New Venture Ideas,which would affect the Opportunity Con?dence.
7.2.External Enablers as Non-Actor component
Even though New Venture Idea is our main suggestion for the Non-Actor nexus component,there are reasons to sometimes assign a greater role to External Enablers.Changes in external conditions are no doubt a trigger of new economic activities and hence of central interest to an understanding of entrepreneurship and its role in the economy.Further,the nexus framework outlined in Fig.2does not address where New Venture Ideas come from in the?rst place.There is therefore reason to also develop and test theory where External Enablers assume the role of Non-Actor nexus element.However,this comes with some caveats.Early identi?cation of External Enablers can be challenging,and traditional,broadly based data may not be able to capture suf?cient variation in External Enablers across cases or within processes over time.This limits the prospects of applying this perspective to concurrent study of
venture creation processes.In many cases —notably imitative start-ups and corporate “me-too ”entry in mature industries —no clearly identi ?able External Enabler has a major role in triggering initiation or determining success.Thus,attention to distinct External Enablers is neither necessary nor suf ?cient for studying the emergence of all kinds of new economic activities.Further,by taking External Enablers as a starting point and not repeating the feedback loops from the previous ?gure,Fig.3does not capture well what Alvarez and Barney (2007,2010)call “creation opportunities ”.For these reasons,we see Fig.3as supplementary to our main argument.
7.2.1.Theoretical development
The overarching research question depicted in Fig.3is “How do characteristics of Actors and attributes of External Enablers independently and interactively in ?uence new venture creation processes?”,where the latter stands for identi ?cation of New Venture Ideas;Opportunity Con ?dence;Action,and Outcomes.Here,there is need for conceptual development that classi ?es External Enablers theoretically rather than just grouping them as socio-cultural,demographic,climatic,regulatory or technological changes and documenting the effects of individual instances of these.A good example here is Grégoire and Shepherd's (2012)work on the role played by structural alignment of what we would label as External Enablers,i.e.,de ?ned technologies and market needs.Another main challenge is to increase speci ?city of the assumed effects for the different explananda in Fig.3,i.e.,the role(s)of External Enablers across the venture creation process.
7.2.2.Empirical development
A range of empirical approaches can be (and have been)used to study what we call External Enablers.Shane (2000)reveals the potential in carefully designed case study research,although this approach shares the limited generalizability of any “small n ”research.If retrospective,case studies usually also suffer from survival bias.Grégoire's work demonstrates the potential in laboratory research (Grégoire and Shepherd,2012;Grégoire et al.,2010a ).A limitation is the restricted ability to address process and dynamism,especially in relation to Action and Outcomes further into the entrepreneurial process.Future research may ?nd ways to overcome this limitation through extension into multi-period designs.This said,inability to study real Action involving high stakes will remain a non-trivial limitation.
Hence,for external validation,observational studies are also needed.High quality information on a meaningful yet manageable range of variation in both Actors and External Enablers is rarely found in archival data.However,longitudinal data collected before and after a “natural experiment ”can be used,as in Shane's (2004)work on the effects of the Bayh –Dole Act.Repeated,cross-context surveys like the Global Entrepreneurship Monitor (Amorós et al.,2013)can occasionally allow addressing —on a rather abstract level —the question of which Actors build more Opportunity Con ?dence and come up with (what kind of)New Venture Ideas in response to particular External Enablers?This is conceivable,e.g.,when the population studied is subjected to major tax reform or signi ?cant currency devaluation between waves of data collection.Future survey studies may be able to follow cohorts of start-up attempts triggered by different External Enablers.Alternatively,the design can aim at capturing the differential in ?uence of a given External Enabler across contexts,e.g.,where a technology or regulation has differential impact across industries or geographical regions.
To sum up,using External Enablers as the Non-Actor component facilitates theorizing and testing of drivers of the identi ?cation and contents of New Venture Ideas.In addition,it can provide insights into the in ?uence of external conditions at different stages of entrepreneurial processes.
8.Conclusion
Our aim is not to discredit prior work on “entrepreneurial opportunities ”or to dissuade others from pursuing research in this area.On the contrary,we argue that the phenomena commonly discussed under the “entrepreneurial opportunities ”label are of central importance,as are many of the ideas previously developed in that literature.We fully acknowledge that it is only thanks to the foundation laid by others that we could identify the inherent problems of the “entrepreneurial opportunity ”construct.Building on that foundation we suggest alternatives that we hope can create avenues for entrepreneurship research to unleash previously under-utilized potential to make important and unique contributions to the broader ?elds of economic and organizational studies.
Fig.3.The Actor —External Enabler Nexus.
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We cannot expect wholesale adoption of our views on the part the research community.However,it is reasonable to suggest that editors and reviewers insist on widely accepted criteria for good science and therefore consider our critique in evaluating manuscripts where“entrepreneurial opportunity”has a central role.Similarly,authors of review articles and meta-analyses may?nd our critique enables them to aggregate knowledge across more precise notions of“opportunity”rather than combining ?ndings across phenomena that—despite a shared label—are exceedingly diverse.
As regards new studies we hope scholars from a broad set of backgrounds will?nd that our delineation of External Enablers,New Venture Ideas,and Opportunity Con?dence provides useful tools that help them make leaps forward in developing knowledge about the phenomena commonly discussed under the elusive“opportunity”label.We cannot guarantee success in such endeavors.For example,it may turn out too challenging a task to distil a manageable set of operable New Venture Idea characteristics that can be meaningfully applied across different types of ventures and stages of the venture creation process.Alternatively,it may turn out to be impossible to?nd suf?ciently generalizable effects of such characteristics or to reliably isolate their effects from those attributable to the Actor.Similarly,distinguishing Opportunity Con?dence from Actor constructs like“entrepreneurial self-ef?cacy”is a challenge. However,all research is challenging and risky.We hold that the constructs suggested in this article reduce the risk and challenges involved in clinging to the“entrepreneurial opportunity”construct.Hence,at this juncture our Opportunity Con?dence is high that the journey we have outlined is a journey worth taking.
Acknowledgments
I would like to thank the many colleagues who have provided encouragement and constructive as well as challenging feedback on previous versions of this paper:Dean Shepherd and three anonymous JBV reviewers;Ted Baker and the2012ENT Division Research Committee;Henri Burgers,Rene Bakker,Jonas Dahlqvist,Scott R.Gordon,Denis Grégoire,Peter G.Klein,Lucia Naldi,Roy Suddaby, Johan Wiklund;other colleagues and former colleagues at QUT and JIBS;participants at presentations of previous versions at EPFL, JIBS,Leuphana University,QUT,University of Aarhus;University of Shef?eld;the2012Residence Week for Entrepreneurship Scholars (Oxford,UK);the2013–14ACERE conferences;the2012and2014Academy of Management meetings,and anonymous reviewers of earlier versions.Great thanks also to Jonathan Bader,Robyn Denton,Jan Gruenhagen,Marcello Tonelli and Christina Wicker for assis-tance in developing this manuscript.
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