Culture, Entrepreneurlal Alertness and OpportunityDiscovery

The Austrian economics market process theory of entrepreneurship is the most elaborated theory of entrepreneurship, as it makes more sense of the role of knowledge and human agency and the context in which it occurs; Austrian economics walks thematically hand in hand with major sociological concepts and methodologies.

Despite popular consensus, for Austrian economics, the market, far from being a place, thing, or collective entity, is rather a process actu­ated by the interplay of the actions of various individuals cooperating under the division of labour (Mises 1949). The successful operation of market exchange resides in the convergence of the actors' expecta­tions. They react to different patterns of possible alternatives and form expectations regarding how to reach certain ends and satisfy their wants. calling the entrepreneur central here is justified by their key attribute of being able to decide what resources to use, as well as which goods and services to produce. Thus, they make speculative production decisions in the face of an uncertain future (Kirzner 2011). This is grounded and rendered possible also by the ability of the actor's mind to understand and investigate causation, as well as the laws of economics.

The decisive role of knowledge in the Austrian model emphasizes the indeterminate and unpredictable character of knowledge caused by the great variability in human preferences, expectations and experiences. This variation is a central economic problem every society faces, and is grounded in the fact that the sum of total knowledge available in an economy never exists in a concentrated or integrated form, but as dispersed bits of incomplete and frequently contradictory knowledge possessed by separate individuals (Hayek 1945). The resulting uncertainty renders it necessary to possess and reach an optimal level of information regarding the quantity and price of products—along with market knowl­edge—in order to make economic decisions (Kirzner 2015). Economic decision-making and action within such an environment requires, there­fore, the possession and mobilization of relevant knowledge in a way that overcomes the impossibility of a single mind aggregating such informa­tion (Hayek 1945). Making better use of dispersed knowledge of available resources, and exploiting the resulting opportunities, appears to be a precondition for acting efficiently within the market.

The Kirznerian entrepreneurial model of alertness and opportunity discovery delivers a framework that addresses the Hayekian knowledge problem as a case of imperfect knowledge and sheer ignorance that makes it possible to sell the same single good at different prices in a market, thus offering an arbitrage opportunity (Kirzner 1973: 37). The alert entrepreneur is able to seize this opportunity by buying the good that was cheaper in a certain place and selling it to another place at a higher price, thereby making profit. The entrepreneur demonstrates successful capitalization of dispersed market knowledge, and carries an attitude of receptiveness to available, but previously overlooked, opportunities (Kirzner 1979).

The complexity of the cognitive dimension of alertness is summarized by Kirzner when he writes that alertness is “a fertile imagination and greater pre-science, residing in the unique entrepreneurial ability to inde­pendently size up a situation and correctly reach an imagined picture of a not yet determined future” (Kirzner 1992: 26). It is indeed a dimension that raises difficult questions on conceptual and methodological levels. This may explain the general occultation of alertness that is shared among researchers, rather than a view of it as the vital concept in the opportunity­discovery nexus, in the mainstream entrepreneurship literature (shane and Venkataraman 2000; Alvarez and Barney 2007; Klein 2008). Unfortu­nately, the concept of opportunity discovery without alertness loses its strong cognitive substance and its individual and entrepreneurial consis­tency. Kirzner's earlier silence regarding the cognitive sources of this superior foresight that characterizes alertness—and the reasons why some individuals discover local opportunities before others—did not help to reduce the number of sharp criticisms, and also reveals the complexity of alertness and its sources (Kirzner 2008: 1).

Reaching a position where one is able to independently size up a situa­tion and evaluate prospective gains through the imagining of future reali­ties requires a deeper mastery of local market logic and uncertainties, and their social foundations.

interestingly, even though the cognitive process of discovery and interpretation of opportunities has been addressed with general satis­faction and resonance within entrepreneurship scholarship over the last decade, less progress has been made in the literature exploring the rela­tionship between cognition and the resulting practical entrepreneurial action. This is an important oversight in the literature because the process of alertness and opportunity discovery is incomplete without action; alertness to opportunities goes logically with the action of taking advantage of said discovered opportunities (Kirzner 1985: 22). It is assumed here that culture, while driving alertness in the process of coping with local market uncertainties and sheer ignorance, logically bears an embedded modus operandi to seize and exploit opportunities via strategy and practical action. This embedded modus operandi is what matters most for the manifestation of entrepreneurship, but it is not addressed thematically and methodologically by the mainstream economic entrepreneurship literature. There is therefore a window of opportunity for mainstream and Austrian economics scholarship to construct a much more complete action-scheme framework for entrepreneurial alertness and opportunity discovery within sociology via the present conceptual­ization of the Kirznerian-ethnic-entrepreneur model, based on Bourdieu's habitus concept.