A TYPOLOGY OF ENTREPRENEURIAL OPPORTUNITY

Abstract

ABSTRACT.This article explores the phenomenon of entrepreneurial opportunity. Entrepreneurial opportunity is depicted as a nexus between the ebb and flow of the environment and our personal, family and business disposition, reflected in our personal knowledge. Opportunity recognition therefore must be seen as an ability not uniform throughout the community. Entrepreneurial opportunity is defined and described as existing within four typologies; imitation, allocative, discovery, and construction, which all have individual characteristics. The paper discusses seeing opportunity based upon prior knowledge, emotional sensitivity, and one's current perspective. The entrepreneurial process and evaluation of any opportunity is considered with a modified SWOT configuration.JEL codes: L26Keywords: entrepreneurship, opportunity, perception, opportunity evaluation, chance, SWOT1. IntroductionAll human activity is directed at some perceived possible future. Our life is dominated by the channeling of our efforts towards creating the future we anticipate for ourselves. The future is a journey for which we are not certain, relying upon our imagination to picture what this future would be like, whether it is just in five minutes or five years time. We can only be certain about this future when we get there.1 The heart of seeing opportunity is about seeing the future, a process that doesn't occur through formal analysis, forecasting or strategic planning process. Rather, opportunity is about seeing the future for what it could be through our aspirations and imagination in ways that other people don't see.There is a passionate, visionary, and exciting side to opportunity that formal systems and theory does not capture adequately. Opportunities create a path where various levels of enthusiasm, skill, resources, rigidity and commitment, and a devised strategy are pursued by individuals and firms. This journey begins with the identification of an opportunity upon which we are inspired and motivated enough to pursue, not always knowing where we will end up. Our actions test what we are anticipating, inferring that pursuing opportunities is about learning.Opportunity cannot be explained by environmental forces or individual factors alone as they are both very much interrelated.2 Understanding the phenomenon of opportunity spans across the disciplines of micro-economics, psychology and cognitive science, strategic management, resource based and contingency theories that are patched together, synchronized and added to form new information in the form of ideas. Opportunity is a situational phenomenon that is developed from incomplete information.3 Opportunity relies on an individual recognizing, discovering or constructing patterns and concepts that can be formed into ideas. Opportunity is a poorly defined concept where theories are good at explaining creation after the event, but been very poor in predicting creation. Theories are limited in their explanations and can only point to what capabilities exist when the individual is developing opportunities. Opportunity models that have been developed by strategy and marketing researchers have difficulty in being applied to entrepreneurial start-ups. Pre-1970s it would have been totally inconceivable to predict that a group of young entrepreneurs who dropped out of university were able to move into the computer industry and be so successful exploiting opportunities that incumbent Fortune 500 firms like IBM couldn't.4The central aspect of opportunity is being able to see it in the first place and acting upon it before others. This is a function of how we perceive the world and process information. The resulting intuition, vision, insight, discovery, or creation is an idea which may upon evaluation become an opportunity. This ability is not uniformly distributed throughout the community,5 as people have different orientations towards time and space as depicted in Figure 1. …

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