The Role of Prior Knowledge in Opportunity Identification

Abstract

The six pathways presented in Chap. 5 highlight a number of different ways that ideas evolved during the incubation process (Fig. 5.7). In this chapter, we explore the development of ideas using the concepts of prior knowledge and opportunity identification. The ability to discover and develop business opportunities is considered to be among the most important abilities of successful entrepreneurs (Politis 2005). A number of scholars have pointed out that experienced entrepreneurs have valuable prior knowledge about contacts, markets, products and resources that improve their ability to identify and develop entrepreneurial opportunities (Shepherd et al. 2000; Ronstadt 1988). Politis (2005) expands on this to suggest that it is the total stock of prior information and knowledge that influences an individual’s ability to recognise opportunities. This could be prior knowledge of business start-up, industry-specific knowledge gained as an employee or customer, or management experience where leadership, communication or problem-solving skills have been acquired (Shane 2003). The interaction between different types of prior knowledge and opportunity identification has the potential to provide greater insight into the way businesses developed during incubatees’ time in INNOSPACE. Moreover, it represents an important point of departure for investigating knowledge that is newly acquired during the incubation process.