Abstract:
There is a growing concern about the heterogeneity of the nature of small businesses in a
given context. The difference between opportunity discovery and creation (mode of
opportunity identification) may explain this heterogeneity. Then the wealth creating
ability also may vary with the mode of opportunity identification although
entrepreneurship literature is silent in this regard. Then the purpose of this study is to
explore the wealth creating potential (innovativeness) of small businesses with regard to
the mode of opportunity identification. Entrepreneurship literature informs that
opportunity discovery under risk is different from opportunity creation under uncertainty
although these terms has been used interchangeably. Few studies show that context may
have influence over the opportunity identification. Few studies show that entrepreneurs
who create opportunities are ordinary and attempt to avoid uncertainty while those who
discover opportunities are unique in ability of discovering opportunities and bear some
risk. However studies which explore the relationship between the wealth creating
potential and mode of opportunity identification are rare. Exploring gaps in research
knowledge base on the nature of businesses emerged under opportunity discovery and
opportunity creation with regard to research question ‘How the mode of opportunity
identification influences the innovativeness of small businesses’. In consistent with
entrepreneurship literature, the nature of business viewed in this study as wealth
creating potential.
This study builds on theories and assumptions pertinent to opportunity discovery and
creation and employs case study method to explore the behaviour of small business
owners in rural and urban settings. The rationale of selecting rural setting is that rural
entrepreneur has no prior business experience to understand the probability of outcomes
while urban entrepreneurs have prior business experience to understand the probability
of outcomes to take calculated risk. This study has selected six cases after screening
178 cases in the rural setting and 111 cases in the urban settings in the North Western Province of Sri Lanka in 2010. Analysing within cases and cross cases employing
pattern matching technique, this study shows that businesses created in the rural context
are comparatively non-innovative than those small businesses discovered under
opportunity risk.
