Schumpeter's Theory of Business Ideas: "Incorporating" Opportunity Creation and Discovery in Management Studies

Frederik Witte

Research output: Working paper/PreprintWorking paper


Management scholars have long separated the study of opportunity creation and discovery, assuming that the nature of opportunities itself is not affected by information acquisition. Research on judgment and decision-making challenges this assumption, confirming that we judge the nature of opportunities in large part by the way we acquire information about it. Management theorists have yet to digest this evidence because of a cue-based view of the opportunity-exploitation relation (i.e., people act on independent opportunity cues), which conceals the effortful acquisition of information (i.e., the formation of the business idea). I build an alternative process view that accommodates available evidence by theorizing business ideas—a reversion to Schumpeter (1912)—to capture the way we acquire information, including pattern recognition and cognitive depletion, as it yields powerful explanations for entrepreneurial dynamics. Schumpeter’s theory elucidates why some people exercise a business idea and leap into entrepreneurship yet others do not; it also explains why entrepreneurship entry is rare, even though opportunities may be prevalent. This article thus contributes to management knowledge by redefining the current division of scholarly labor as a consequential theoretical problem and developing the requisite theoretical tools to redress that problem. Through business ideas, I theorize information acquisition and its relation to entrepreneurial dynamics in a way that fosters the sustainable integration of opportunity creation and discovery in the process view of entrepreneurship entry in management studies.
Original languageEnglish
Publication statusUnpublished - 2015

Subject classification (UKÄ)

  • Business Administration


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