Opportunity Identification by Entrepreneurs with Different Knowledge Sources: A Social Capital Perspective

A significant debate has emerged on the origins of knowledge for firm formation, and scholars classify these origins into three categories of entrepreneurship, namely "academic", "employee", and "user" entrepreneurship. The theories of opportunity identification are formulated into two schools of thought that manifest in two distinct concepts. The theory of opportunity creation relates to the subjective nature of opportunities, while the theory of opportunity discovery emphasizes the objectivity of the opportunities. Our analytical research gathers literature on these separate phenomena. We suggest how each type of entrepreneur identifies opportunities based on the effect of their social capital on entrepreneurial alertness. We conclude that the weak social ties among user and employee entrepreneurs lead them in discovering opportunities; whereas the endoinstitutional social capital of academic entrepreneurs inhibits them from benefitting from higher alertness, thus they create more opportunities than discovering them. The discussions presented in this paper aim to advance the theory of entrepreneurship.