The Unit of Analysis in Entrepreneurship Research: Opportunities or Investments?

The entrepreneurship literature in management research focuses increasingly on opportunities-their creation or discovery, evaluation, and exploitation-as the unit of analysis. We argue first, that the opportunity perspective emerged from the "functional" literature in the economics of entrepreneurship (mainly the works of Israel Kirzner), a literature that emphasizes not the individual entrepreneur per se, but the functions (e.g., market clearing) that entrepreneurs undertake in a market economy; second, that most notions of entrepreneurship in economics and management are not easily integrated into the theory of the firm; third, that the popular emphasis on opportunity discovery tends to direct attention from opportunity exploitation, and therefore the firm; and fourth, that the Cantillon-Knight-Mises view of entrepreneurship as judgment links more naturally with the economic theory of the firm.