Nicholas Dew

Three Views of Entrepreneurial Opportunity

For almost 50 years now, following the trail of issues raised by economists such as Hayek, Schumpeter, Kirzner, and Arrow, researchers have studied the economics of technological change and the problem of allocation of resources for invention (invention being the production of information). The bulk of this literature simply assumes that new technical information will either be traded as a commodity or become embodied in products and services (hereafter called “economic goods”), without addressing any specific mechanisms or processes for the transformation of new information into new economic goods or new economic entities (such as new firms and new markets). It is inside this gap that we begin our quest for the concept of an “entrepreneurial opportunity.”

The Economic Implications of Exaptation

Abstract.Accounts of economic change recognize that markets create selective pressures for the adaptation of technologies in the direction of customer needs and production efficiencies. However, non-adaptational bases for technological change are rarely highlighted, despite their pervasiveness in the history of technical and economic change. In this paper the concept of exaptation -a feature co-opted for its present role from some other origin - is proposed as a characteristic element of technological change, and an important mechanism by which new markets for products and services are created by entrepreneurs. Exaptation is a missing but central concept linking the evolution of technology with the entrepreneurial creation of new markets and the concept of Knightian uncertainty.

Serendipity in Entrepreneurship

This paper addresses the concept of serendipity in entrepreneurship, defined as search leading to unintended discovery. It conceptually delineates serendipity, showing how it is related to the entrepreneurship literature on prior knowledge and systematic search. The paper also discusses how serendipitous entrepreneurship relates to some aspects of evolutionary theory, socio-economic institutions, and social psychology. It is suggested that serendipity may be a quite prevalent feature of entrepreneurship and thus has implications for both research and practice.

Effectuation and Over-Trust: Debating Goel and Karri

In their article on entrepreneurship, effectuation, and over–trust, Goel and Karri suggest relationships between effectuation, over–trust, and certain psychological characteristics of entrepreneurs. In this response we debate their article. Goel and Karri are correct in claiming that effectuation supposes over–trust. However, we argue that effectual logic works in a different way than they presented because it neither predicts nor assumes trust. Goel and Karris article also draws attention to the behavioral assumptions underlying constructs such as over–(under) trust. Our suggestion is that effectuation is based on alternative behavioral assumptions that open up interesting avenues for future research in entrepreneurship.

Abduction: a pre-condition for the intelligent design of strategy

Purpose – This paper seeks to introduce the concept of abduction to strategists and show how abduction is an important influence on the effective design of strategies. Design/methodology/approach – The paper defines what is meant by abduction, and describes why abduction is a pre-condition for intelligent designing. It reviews different characteristics of abduction, and suggests several situations in which abduction is used in strategic thinking. It describes a framework managers can use to get better at abductive thinking. Findings – The paper finds that strategists can gain a lot from knowing how to use abduction well. Abduction is making inferences to the best explanation from information that is surprising or anomalous – both very typical in strategic decision making. Abduction is frequently integral to problem defining. Problem defining, in turn, sets the stage for possibility thinking, and choice of the best alternative. Therefore, good abductive thinking is a pre-condition for intelligent designing...

Immortal firms in mortal markets?: An entrepreneurial perspective on the “innovator's dilemma”

Purpose – The “innovators dilemma” suggests that by listening to current customers leading firms often lose their markets to upstart newcomers as a result. The purpose of this paper is to understand how entrepreneurs successfully create such upstart firms and new markets, since this ought to have direct implications for theorizing about the innovators dilemma.Design/methodology/approach – The paper examines implications of recent studies in entrepreneurial expertise that show expert entrepreneurs use an effectual logic of non‐predictive control. It then connects these ideas to notions of firms and markets as artifacts of entrepreneurial action. Finally, it describes the implications of these concepts for the innovation strategies of large corporations, and specifically for firms periodically facing the innovators dilemma.Findings – The findings suggest that the practical answer to the innovators dilemma is not to predict technology trajectories more accurately, or otherwise strive to build immortal fi...

Optimal Inertia: When Organizations Should

We challenge the premise that the CEOs job is to keep the corporation alive and thriving at all costs and under all circumstances. We briefly review the differing normative views of strategic management theorists and organizational theorists about organizational inertia. We then develop an economic model of incumbent behavior in the face of challenger competition that accommodates complementary assets. The model predicts and describes conditions under which organizational inertia, as subsequent organizational failure, is optimal. We then extend the logic and propose that the failure of entrepreneurial firms does not necessarily imply the failure of entrepreneurs. We conclude with a call to study “exit” as a viable strategic option.

Unpacking entrepreneurship as collective activity: opportunities, activity and context

In “The next wave of entrepreneurship research,” Schoonhoven and Romanelli (hereafter S&R, this volume) set forth a broad-gauge review of recent work in entrepreneurship. They challenge standard debates and focus on arguments and research that explore large-scale contextual variation in complex ecologies of entrepreneurship over time. Further, their review puts networks and teams, communities of expertise and knowledge, and collective activity at the center of new directions for entrepreneurial research. They contend, in this paper and elsewhere, that the important questions going forward “concern the mass effects of entrepreneurial activity on the creation of new firms and industries, the pioneering of emerging markets, the evolution of existing industries, the development of regional economies, and even … the competitiveness of nations” (Schoonhoven & Romanelli, 2001, p. 383).

Institutional Entrepreneurship A Coasian Perspective

Economists have long argued that the prevailing institutional structures of the economic system produce a particular spectrum of entrepreneurial activity. However, these institutions themselves change over time, sometimes as the result of entrepreneurial behaviour. This paper investigates the idea of institutional entrepreneurship from a Coasian perspective. This perspective puts transaction-cost-reducing institutions at the centre of the analysis, and examines the role of institutional entrepreneurs in constructing and transforming these economically valuable artefacts. The paper presents a case study of an institutional entrepreneur and concludes that, from a Coasian perspective, institutional entrepreneurship is one type of entrepreneurial behaviour that seems worthy of further research.

Cookies for the real world: Assessing the Potential of RFID for Contractor Monitoring

The purpose of this paper is to draw together in one place knowledge that is relevant to the possible role of RFID (Radio Frequency IDentification) in contractor monitoring. The paper uses multiple case studies and internet survey methods to explore several issues in RFIDenabled monitoring of contractors. It also offers some conceptual frameworks to help decision makers think through ways RFID might emerge as a contractor monitoring technology as well as some of the key reasons for using this mechanism of monitoring. The paper concludes with research challenges and key issues for practitioners.