Prior Knowledge and the identification of opportunities

In a previous post, we quoted Shane and Venkataraman (2000) "To have entrepreneurship, you must first have entrepreneurial opportunities" to portray the link between entrepreneurship and opportunity identification. But, how do entrepreneurs identify business opportunities? which factors influence the discovery process? Research on opportunity identification, from an objective perspective (Wood & McKinley, 2010), has shown that entrepreneur's prior knowledge allows them to recognize certain opportunities, but not others (Venkataraman, 1997); even in a situation were information about the opportunity is shared openly (for example a patent or a technological change), only few individuals are able to discover the factors that trigger a business opportunity (Shane, 2000). Prior knowledge is built upon work experience, education or other means, and could be organized in three dimensions: prior knowledge of markets, prior knowledge of ways to serve markets, and prior knowledge of customer problems (Shane, 2000). The study of the role of prior knowledge on opportunity identification, fits with the discovery approach (Alvarez & Barney, 2007) line of thinking, usually counterposed to the constructivist perspective of the creation approach (Wood & McKinley, 2010). The Innova Institute is involved in a research project on the role of prior knowledge on opportunity identification, we are currently exploring how entrepreneur's prior knowledge fostered the identification of the opportunity (Garcia, 2009). We would like to hear your opinions and experiences on how prior knowledge shapes your capacity to identify opportunities, either if you are currently involved in an entrepreneurial initiative or if you are involved in an innovation project in your company. How has your previous experience and knowledge impacted on the identification of the business opportunity? Do you think that different types of knowledge (managerial/entrepreneurial or technology/industry) allow you to see things that others can't identify? Comments and contributions welcomed! References:

• Alvarez, S. & Barney, J., 2007. Discovery and creation: alternative theories of entrepreneurial action. Strategic Entrepreneurship Journal, 1(1-2), 11-26.
• Garcia, R., 2009. El conocimiento a priori de los individuos y la identificación de las oportunidades de emprendeduría: el papel complementario del conocimiento de negocio y el conocimiento emprendedor. Advanced Studies Diploma (DEA), La Salle - Ramon Llull University.
• Shane, S., 2000. Prior knowledge and the discovery of entrepreneurial opportunities. Organization Science, 25(1), 448–469. Shane, S. & Venkataraman, S., 2000. The promise of entrepreneurship as a field of research. The Academy of Management Review, 25(1), 217–226.
• Venkatraman, S., 1997. The distinctive domain of entrepreneurship research. In J. Katz Advances in Entrepreneurship, Firm Emergence and Growth. JAI Press, pp. 119-138.
• Weick, K., Sutcliffe, K. & Obstfeld, D., 2005. Organizing and the process of sensemaking. Organization science, 16(4), 409.
• Wood, M.S. & McKinley, W., 2010. The production of entrepreneurial opportunity: a constructivist perspective. Strategic Entrepreneurship Journal, 4(1), 66-84.