6.2.2 Social Capital
Networking is important in entrepreneurship as it can lead to sustainable oppor- tunities that sustain the survival of the venture (Abdullah et al.2009). Relationship can be with the external general public and also the internal public of the organi- zation. Social capital also refers to the ability of actors to extract benefits from their networks, memberships and social structure (Myint et al. 2005). In addition, Nahapiet and Ghosal (1998) indicated that social capital is multidimensional and occurs at both the individual and the organizational levels. Meanwhile, the important role for an entrepreneur might be a personal relationship. A strong relationship has been argued to bond actors via mechanisms such as reciprocity, trust and the threat of future censure from exchange (Davidsson and Honig2003).
On the other hand, according to Ardichvili et al. (2003), the nature of social networks which include action set, partnerships, weak ties, and inner circle also determines the level of entrepreneurial alertness.
6.2.3 Experience
Baron (2006) suggested that entrepreneurs tend to associate their past experience to interpret and identify new business opportunity. In other words, they use cognitive frameworks they possess to “connect the dots” between changes in the external environment which are the markets, technology, politics, and other factors. The patterns they then perceive in these events or trends eventually suggest ideas for new products or services for the new ventures. Earlier, (Gaglio and Katz 2001) highlighted that individual histories and life experiences eventually turn into indi- vidual meanings and interpretations that shape their stock of knowledge and make it idiosyncratic. The idiosyncratic knowledge and information creates an individual knowledge corridor which enables people to recognize opportunities (Kuivaniemi 2010). Hence, experience entrepreneur can identify opportunity better than novice entrepreneurs (Leonie2013).
6.2.4 Knowledge
Knowledge is not easily transferable to others. It enables one to see certain patterns in market behaviour, subtle differences in quality of goods, or ways to identify whether resources are being used efficiently (Holcombe 2003). Conversely, Ardichvili et al. (2003) indicated prior knowledge as one of the antecedents of the 6 Factors that Contributes Towards Opportunity Creation… 57
entrepreneurial opportunity identification and development. According to Von Hippel (1994), mostly people will tend to notice information that is related to information that they already know. In addition, Shane2000 assumed that entre- preneurs will discover opportunities because prior knowledge triggers recognition of the value of the new information. Besides, Shane (2000) people who learn new knowledge will most likely to use it for new opportunity discovery. Meanwhile, Li et al. (2015) concurred that prior knowledge significantly and indirectly affected opportunity recognition through its impact on entrepreneurial alertness. The entrepreneurial alertness of non-entrepreneurial university students significantly influenced their opportunity recognition. On the other hand, the prior knowledge of entrepreneurial university students greatly influenced their opportunity recognition.
On the other hand, leveraging external actors by exploiting their knowledge can help to create opportunity (Berglund2007). It is important to note that knowledge acquisition and sharing can lead to opportunity creation such as research and development done by the universities researchers (Dang and McKelvey2016).
6.2.5 Entrepreneurial Opportunity
An opportunity is an image in the person’s mind, particularly an entrepreneur (Penrose1959, p. 42). In relation to that, entrepreneurs take advantage on oppor- tunity to generate profit (Kirzner1999). Entrepreneurial opportunity can be defined
“…as situations in which new goods, services, raw materials, markets and orga- nizing method can be introduced through the formation of new means, ends, or means-ends relationships…” (Eckhardt and Shane2003, p. 336). Opportunity can be categorized into two types of formation which are (1) opportunity creation or Schumpeterian and (2) opportunity identification or Kirznerian (Jong and Marsili 2010).
6.2.5.1 Opportunity Creation
In principle, opportunity creation emphasizes on the newness that had never been seen before which are derived due to invention and innovation. The newness in its value proposition will destruct the current equilibrium the present market where it will take over (Jong and Marsili 2010). However, Berglund (2007) indicated opportunity creation may require expert entrepreneurs engage with external actors to adjust and translate existing solutions but require strategically leveraging rela- tionships. On the other hand, opportunity creation is based on entrepreneurs’ subjective perceptions and created through social interactions and learning
processes. All these trigger entrepreneurs’ subjective notions of opportunity and environment (Sarasvathy2001; Alvarez and Barney2007).
6.2.5.2 Opportunity Identification
In discovery theory, competitive imperfections are assumed to arise exogenously, from changes in technology, consumer preferences, or some other attributes of the context within which an industry or market exists (Krizner 1973). In addition, Shane (2003) were cited that technological changes, political and regulatory changes, and social and demographic changes as examples of the kinds of events that can disrupt the competitive equilibrium that exists in a market or industry, thereby forming opportunities. Besides, opportunity identification is all about searching systematically by scanning the environment to identify opportunities that enable the production of new products or services. However, it is also important to note the duration and direction of the process in order to avoid confusion in searching the opportunity that might involve global search (Levinthal1997).