Opportunity Discovery, Entrepreneurial Action, and Economic Organization
Peter G. Klein
University of Missouri, Division of Applied Social Sciences; Norwegian School of Economics and Business Administration; Ludwig von Mises Institute
June 5, 2008
Strategic Entrepreneurship Journal, Forthcoming
This paper reviews and critiques the "opportunity discovery" approach to entrepreneurship and argues that entrepreneurship can be more thoroughly grounded, and more closely linked to more general problems of economic organization, by adopting the Cantillon-Knight-Mises understanding of entrepreneurship as judgment. I begin by distinguishing among occupational, structural, and functional approaches to entrepreneurship and distinguishing among two influential interpretations of the entrepreneurial function, discovery and judgment. I turn next to the contemporary literature on opportunity identification and argue that this literature misinterprets Kirzner's instrumental use of the discovery metaphor and mistakenly makes "opportunities" the unit of analysis. I then describe an alternative approach in which investment is the unit of analysis and link this approach to Austrian capital theory. I close with some applications to organizational form and entrepreneurial teams.
Number of Pages in PDF File: 34
Keywords: entrepreneurship, opportunities, alertness, judgment, heterogeneous capital
JEL Classification: M13, L22, B25, E22Accepted Paper Series
Date posted: June 6, 2008 ; Last revised: July 18, 2008
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