The Role of Prior Knowledge in the Process of Recognizing Entrepreneurial Opportunities

Abstract

Recognizing opportunities has often been raised as a crucial aspect of the entrepreneurial process. It seems that the ability to identify, analyze and develop entrepreneurial opportunities is what differentiates entrepreneurs from those who are not. This assertion highlights the relevance of understanding in greater depth the variables that have an influence on the process of recognizing opportunities. In this context, an entrepreneur’s prior knowledge and experience, which can be broken down into three domains, have an impact on the dimensions of recognizing opportunities, such as the scope of the opportunity and the intensity of the process. Deriving from this dynamic, the objective of this study is to understand the role of prior knowledge in the process of recognizing entrepreneurial opportunities. By way of in-depth interviews with ten entrepreneurs, it was concluded that those who have limited professional experience attribute greater relevance in the process to their educational activities. When it comes to recognizing opportunities, however, these same entrepreneurs have a broader scope and approach the process in a more intense way. Entrepreneurs who have a better-defined mental framework, on the other hand, which results from their vast professional experience, tend to channel any opportunities they recognize towards the industry in which they operate and this results in fewer potential businesses.