Here are two very interesting journal articles on Kirzner's theory of entrepreneurship. Peter Lewin's characteristically thoughtful and careful treatment characterizes entrepreneurial opportunities as "the potential to create value," a formulation that rightly emphasizes the uncertainty inherent in entrepreneurial action. (In a 2008 article I referred to opportunities as "imagined," but now I prefer to drop "opportunity" language altogether, and talk simply about beliefs, actions, and results.) Steffen Korsgaard, Henrik Berglund, Claus Thrane, and Per Blenker offer a new interpretation of Kirzner, distinguishing between "Kirzner Mark I," which treats opportunities as exogenous and entrepreneurship as reactive, and "Kirzner Mark II," which incorporates time and uncertainty. I like the paper but have trouble reconciling the two Kirzners; I much prefer Kirnzer Mark II but think this Kirzner is essentially a repudiation of the earlier one. Anyway, both of these papers deserve careful study!
Entrepreneurial Opportunity as the Potential to Create Value
Peter Lewin
Review of Austrian Economics 28(1), March 2015Unpacking the concept of entrepreneurial-opportunity to include three categories of essential ingredients, provides a fruitful framework for applying Israel Kirzner’s approach to entrepreneurship—bridging the entrepreneur as someone alert to opportunities to create value, to real world situations requiring the entrepreneur’s evaluation of resource-inputs and prospective outputs, and his perception of what actions are necessary and need to be coordinated, in an environment of sufficient mutual understandings. To fully understand how the entrepreneur makes superior evaluations, one must address all of these three categories.
A Tale of Two Kirzners: Time, Uncertainty, and the “Nature” of Opportunities
Steffen Korsgaard, Henrik Berglund, Claus Thrane, and Per Blenker
Entrepreneurship Theory and Practice, forthcomingThis paper discusses the influence of Israel Kirzner on the field of entrepreneurship research. We review Kirzner's work and argue that it contains two distinct approaches to entrepreneurship, termed Kirzner Mark I and Kirzner Mark II. Mark I with its focus on alertness and opportunity discovery has exerted a strong influence on entrepreneurship research in the last decade, and helped catapult the field forward. We propose that Mark II, with its emphasis on time, uncertainty, and creative action in pursuit of imagined opportunities, complements the discovery view and can provide an alternative conceptual grounding for the decade to come.
