Ans. One of the most important things in entrepreneurship is the creation and discovery of opportunities. Without an opportunity, there cannot be entrepreneurship. That's why opportunity recognition is the key factor in the entrepreneurship process and identifying opportunities is one of the most important abilities of a successful entrepreneur. Two theories explain the relationship between opportunities and entrepreneurship. These are :
- Discovery Theory: It says that an opportunity comes into existence when a person identifies it. Also, a person takes up this activity because of the existing opportunity. According to this theory, an opportunity is objective and it does not depend on whether an entrepreneur finds it or not. Every entrepreneur is unique and hence has a different ability to a recognition of opportunities. Risk bearing is an essential part of the entrepreneurship process. While acting upon the opportunity, most of the entrepreneurs remain uncertain about the success of the chosen opportunity and hence involves risks.
- nutshell according to this theory, opportunities are objective and entrepreneurs are risk bearers.
- Creation theory: According to this theory opportunities are subjective in nature and entrepreneurs' decision frameworks and actions result in the creation of opportunities. Hence opportunities don't have any existence without the actions of entrepreneurs. They are not recognized but created by them. It also states that entrepreneurs act on the opportunities created by them by already estimating the percentage success and thus there is uncertainty but not risks.
- nutshell this theory suggests that opportunities are subjective and entrepreneurship contains uncertainty, not risks.