Opportunity Discovery, Entrepreneurial Action, and Economic Organization

Strategic Entrepreneurship Journal, Forthcoming

34 Pages Posted: 6 Jun 2008 Last revised: 18 Jul 2008

See all articles by Peter G. Klein

Peter G. Klein

Baylor University - Hankamer School of Business; Norwegian School of Economics (NHH) - Department of Strategy and Management; Ludwig von Mises Institute

Date Written: June 5, 2008

Abstract

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.

Keywords: entrepreneurship, opportunities, alertness, judgment, heterogeneous capital

JEL Classification: M13, L22, B25, E22

Suggested Citation

Klein, Peter G., Opportunity Discovery, Entrepreneurial Action, and Economic Organization (June 5, 2008). Strategic Entrepreneurship Journal, Forthcoming, Available at SSRN: https://ssrn.com/abstract=1141549

Peter G. Klein (Contact Author)

Baylor University - Hankamer School of Business ( email )

Waco, TX 76798
United States
254-710-4903 (Phone)

Norwegian School of Economics (NHH) - Department of Strategy and Management ( email )

Breiviksveien 40
N-5045 Bergen
Norway

Ludwig von Mises Institute ( email )

Auburn, AL
United States

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