Opportunities and Resources for Disruptive Technological Innovation

Abstract

Whether entrepreneurial firms discover or create opportunities is a classic debate, here explored in the context of disruptive innovations. In this paper we reframe the question to focus not on the nature of entrepreneurial opportunity but on how and for whom entrepreneurs undertake disruptive innovations. As to whether entrepreneurs detect or create opportunities, we show with examples that they do both. To reveal how they do so, we examine how entrepreneurial innovators obtain and organize resources for their ventures as part of the opportunity creation process. This theme is grounded in conceptual work on disruptive innovations by Christensen (1997) and work by Penrose on how resources are matched to opportunities by entrepreneurial firms (1995). In the context of three areas of demand growth, we examine how entrepreneurial firms provide innovations to meet demand through opportunity discovery, opportunity creation and by combining the two. This reveals the creative thought and endeavour required to turn possibility into reality. This often involves devising disruptive technological innovations, as shown by examples of opportunity detection and creation among entrepreneurial firms. We begin by looking at varieties of technology that can be used to exploit opportunities in growth markets by multi-national firms. Case profiles show how small resource-constrained firms also address growth opportunities - by developing frugal engineering and business models to launch disruptive innovations. Entrepreneurial firms configure resources in new ways to meet neglected customer needs as part of the act of opportunity creation. We conclude with some questions for future research.

Keywords: disruptive innovation, entrepreneurs, opportunities, resources

JEL Classification: M13, O3