The cognitive perspective: a valuable tool for answering entrepreneurship's basic “why” questions

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Abstract

It is suggested that a cognitive perspective may provide important insights into key aspects of the entrepreneurial process. Specifically, it is proposed that this perspective—which has yielded impressive results in many other fields—can help the field of entrepreneurship to answer three basic questions it has long addressed: (1) Why do some persons but not others choose to become entrepreneurs? (2) Why do some persons but not others recognize opportunities for new products or services that can be profitably exploited? (3) Why are some entrepreneurs so much more successful than others? Specific cognitive factors relevant to each of these questions are identified, and their potential effects are described. It is suggested that a cognitive perspective can prove beneficial both to researchers wishing to understand entrepreneurship as a process and to practitioners hoping to assist entrepreneurs in their efforts to create successful new ventures.

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Executive summary

The cognitive perspective emphasizes the fact that everything we think, say, or do is influenced by mental processes—the cognitive mechanisms through which we acquire store, transform, and use information. It is suggested here that this perspective can be highly useful to the field of entrepreneurship. Specifically, it can assist the field in answering three basic questions it has long addressed: (1) Why do some persons but not others choose to become entrepreneurs? (2) Why do some persons but

Why do some persons but not others choose to become entrepreneurs?

Why did I, personally, decide to become an entrepreneur—to risk my time, accumulated wealth, and energy, in an effort to bring a new product to market? Clearly, many factors played a role. It seems very unlikely that I would ever have decided to adopt this course of action if I had not previously been exposed to actual entrepreneurs, either directly through personal contact, or indirectly through the media. In fact, I had observed entrepreneurs in both contexts: my grandfather started and ran a

Why do some persons but not others recognize opportunities?

Identification of a viable economic opportunity is an important initial step in the entrepreneurial process. In fact, entrepreneurs' decisions to found new ventures often stem from their belief that they have identified an opportunity no one else has yet recognized and so can benefit from being first to enter the marketplace. (Interestingly, however, growing evidence suggests that being an early follower may be more advantageous than being first in terms of order of entry into a market; Durand

Why are some entrepreneurs more successful than others?

That a large proportion of new ventures fail is clear; indeed, more than half vanish within a few years of being founded (Cooper et al., 1989). Yet others go on to major success and generate large amounts of wealth for their founders, many employees, and the communities in which they are located. This raises a question that is central to the field of entrepreneurship: What factors play a role in the financial success of new ventures? Clearly, the answer to this question is complex and involves

Benefits of a cognitive perspective: some concluding thoughts

The major conclusion of this paper can be stated quite succinctly: a cognitive perspective can prove extremely valuable to the field of entrepreneurship in its efforts to address several basic issues. As shown in Table 2, a wide range of cognitive factors and processes may prove helpful in this respect. Overall, then, including this perspective in the field's overall “tool kit” appears to offer the potential for significant benefits.

In concluding, it is important to note, once again, that a

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