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Davidsson, Per, Recker, Jan Christof, & von Briel, Frederik(2020)External enablement of new venture creation: A framework.Academy of Management Perspectives, 34(3), pp. 311-332.
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https://doi.org/10.5465/amp.2017.0163
External Enablement of New Venture Creation: A
Framework
Journal: Academy of Management Perspectives
Manuscript ID AMP-2017-0163.R2
Document Type: Symposium
Keywords:
Entrepreneurship (General) < Entrepreneurship < Topic Areas, Technology
and Innovation Management < Topic Areas, Environmental components
(conceptualizing and assessing) < Organization and Management Theory <
Topic Areas, Adaptation/Change < Organization and Management Theory <
Topic Areas, New venture strategies < Entrepreneurship < Topic Areas
Academy of Management Perspectives
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External Enablement of New Venture Creation: A Framework
Per Davidsson
Queensland University of Technology and Jönköping International Business School
per.davidsson@qut.edu.au
Jan Recker
University of Cologne and Queensland University of Technology
jan.recker@wiso.uni-koeln.de
Frederik von Briel
Queensland University of Technology
frederik.vonbriel@qut.edu.au
Acknowledgement: We would like to acknowledge the constructive feedback received on
earlier versions of this manuscript from the editor, Mike Wright, and two anonymous AMP
reviewers as well as from participants at presentations of this research at the 2017 Academy of
Management Annual Meeting; the 2016 Australian Centre for Entrepreneurship Research (ACE)
paper development boot camp, and at research seminars at University of Adelaide, Jönköping
International Business School, QUT Business School, University of Stavanger, and University of
Sydney. We thank the Institute for Future Environments (IFE) at QUT for financial support of
the project that triggered the writing of this paper.
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External Enablement of New Venture Creation: A Framework
ABSTRACT
In searching for conceptualizations that offer an alternative perspective to “entrepreneurial
opportunities”, the notion of external enablers has recently been suggested for capturing the
influence on entrepreneurial action and outcomes exerted by external conditions like new
technologies, regulatory or demographic shifts, and changes to the socio-cultural, economic,
political, or natural environments. We take the external enabler perspective several steps further.
We develop a new framework that conceptualizes external enablers in terms of their
characteristics, roles, and mechanisms and detail their implications for entrepreneurial action
and outcomes. We argue that this framework provides a more productive perspective for
theorizing about the influence of external, actor-independent factors on venture creation
processes than Discovery Theory’s notion of objective, pre-existing opportunities. At the same
time, it is compatible with the dynamic-agentic view of new venture creation proposed by
varieties of Creation Theory. For researchers who are interested in instances of societal change
from a sociological or historical vantage point, the framework facilitates theorizing across such
instances and about the microfoundations of aggregate-level changes. Additional domains that
can benefit from our new framework include design- and strategy-oriented research and practice.
Keywords: Creation Theory, Digital Technology, Discovery Theory, Entrepreneurship,
Environmental Change, External Enabler, Framework, Institution, Jolt, Mechanism, New
Venture Creation, Opportunity, Process
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INTRODUCTION
There is broad agreement that technological advances, regulatory changes, demographic
trends, and changes to the socio-cultural, economic, political, and natural environments are
disequilibrating forces with important influence on entrepreneurial action and outcomes (Alvarez
& Barney, 2013; Bradley, 2015; Dimov, 2011; Ramoglou & Tsang, 2016; Shane, 2012). Yet,
existing frameworks about new venture creation do not offer theoretical concepts that apply
across different types of change such as those above, nor do they detail their possible effects on
individual, emerging ventures. We take this step. We develop a new framework for the study of
external enablement of new venture creation.
We develop this framework not because the study of external enablement has not been
attempted before but rather because previous attempts have had limited success. In developing
what is now widely known as Discovery Theory, Shane and Venkataraman (2000) intended to
give external conditions the same weight as the entrepreneurial agent. However, while this
paradigm has made progress on how agent characteristics contribute to perception and evaluation
of situations as representing opportunities (e.g., Grégoire & Shepherd, 2012; McMullen &
Shepherd, 2006; Wood & Williams, 2014) it has largely failed to generate theoretical language
and generalizations regarding how external elements of change enable individual cases of
venture creation (Arend, 2014; Kitching & Rouse, 2016; Shane, 2012). Part of the reason for this
failure might be the portrayal of external factors in the philosophically, conceptually and
empirically challenging form of complete, objectively pre-existing and actor-independent
opportunities (Alvarez & Barney, 2013; Korsgaard, 2013; Sarason et al., 2010; Dimov, 2011;
Davidsson, 2015).
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Likewise, by emphasizing process, dynamism, learning, social interaction and creative
agency, Effectuation Theory (Sarasvathy, 2001; 2008), Creation Theory (Alvarez & Barney,
2007; Alvarez, Barney & Anderson, 2013) and a range of other contributions (e.g., Dimov, 2007;
Wood & McKinley, 2010) have added elements that are relatively neglected in Discovery
Theory. Yet, with regard to external circumstances to which entrepreneurs can apply their
creative agency they, too, have little to offer. The theorists behind Creation Theory even
conclude that “the term ‘search’ has little or no meaning” (Alvarez & Barney, 2007: 15) in their
theory, thereby denying the possibility of search for and use of any facilitating circumstances in
the external environment.
Finally, literatures on environmental jolts and other individual instances of external
change as related to entrepreneurial activity also acknowledge the important role of such
disequilibrating events (Bradley, 2015; Eberhart, Easley & Eisenhardt, 2017; Hiatt, Sine, &
Tolbert 2009). However, this stream is rather small and scattered, with each study focusing on a
single instance of change, leading to limited potential for more abstract theorizing across
instances and types of change.
As a result, research on new venture creation currently lacks a strong conceptual platform
for theorizing about how external disequilibrating forces influence individual venture creation
processes. We hold this to be a significant deficiency. We develop a new perspective for the
venture-level study of how new technologies, regulatory changes, demographic trends, and
changes to the socio-cultural, macroeconomic, political, and natural environments enable the
creation of individual new ventures. Continuing from Davidsson (2015) we denote these and
other changes as external enablers, which we conceptualize in terms of their characteristics,
mechanisms and roles to develop a framework that captures communality and variance in
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multiple ways within and across various types of environmental change for the benefit of
venture-level analysis. Our new framework offers structure, language, and theoretical logic to
guide further theorizing and empirical investigation of new venture creation.
For those who have a strong belief and interest in the importance of objective, external
influences to emerging new ventures (as per Discovery Theory), our framework bypasses
dichotomization into opportunities versus non-opportunities by instead focusing on partial
enablement. It clearly distinguishes between what a particular venture is trying to realize (their
new venture idea) and the external factors they and other ventures may benefit from in so doing
(the external enablers)1. Further, it facilitates research into issues of process and outcomes and
offers a more inclusive and liberal view of entrepreneurial agents and agency, for example, by
recognizing that agency can be dispersed (Nambisan, 2017).
For those favoring a more agentic view of new venture creation (as per Effectuation and
Creation theories) the framework makes it possible to add systematic attention to the external
“raw material” at entrepreneurs’ disposal without sacrificing current emphases on process,
creativity, and agency. It allows incorporation of both socially constructed and more material
external circumstances in theorizing of the context that imbues action and outcomes in
processual analysis (Pettigrew, 1997).
1 This levels issue has always been problematic in research focusing on entrepreneurial opportunities. For example,
new technologies are sometimes described as opportunities in themselves whereas in other instances that label is
used for specific applications of these technologies (Eckhardt & Shane, 2010: 49 vs. 61; Shane, 2003: 34 vs. 24).
Ramoglou and Tsang (2016), while insisting that objective opportunities only (pre-) exist in abstracto nevertheless
discuss concrete cases like selling Je Suis Charlie t-shirts in response to the Charlie Hebdo attack as an opportunity
(Davidsson, 2017). In Creation Theory accounts it is often unclear whether what the agent creates is simply a viable
business or a set of circumstances that other agents can also exploit.
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Researchers with a more macro-oriented interest in external change as trigger and
facilitator of entrepreneurial activity might find the framework helpful as a new and more
effective way to theorize across such instances of seemingly different nature. It also facilitates
examination of microfoundations, that is, the venture-level processes that are triggered by and
give specific shape to aggregate-level changes, as per Coleman’s (1990) bathtub model (cf.
Bjørnskov & Foss, 2016; Kim, Wennberg & Croidieu, 2016). Outside of entrepreneurship, some
of our concepts and ideas may be possible to integrate productively for revitalization of existing
frameworks addressing how incumbent organizations deal with environmental change, such as
the literature on strategic issues (Jackson & Dutton, 1988; Miller & Lin, 2015).
THEORETICAL FOUNDATION
Because our framework develops a radically new perspective on how to incorporate the
influence of external, actor-independent factors into venture creation research, it is important to
explicitly articulate underlying assumptions and sources of inspiration before introducing the
framework itself. Although our framework is novel, it was not developed in a vacuum; many of
its underlying assumptions are based on and aligned with prior work. In this section, we outline
these assumptions and their main sources.
First, we embrace the view that the core of entrepreneurship is the creation of new
ventures (or of “new economic activity” as Wiklund, Davidsson, Audretsch, & Karlsson, 2011,
put it). Our framework aims to facilitate theory development and empirical study of new venture
creation that does not stop at the means (the enabler) as opportunity research has often done. We
apply the emerging venture itself—rather than founder(s), a well-developed venture, or a stable
founder-venture dyad—as the focal unit of analysis (Davidsson & Wiklund, 2001). Although we
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recognize that new venture creation can occur in different organizational contexts (Shane &
Venkataraman, 2000), our framework’s focus is primarily on independent start-ups rather than
corporate entrepreneurship activities.
Second, we adopt Shane and Venkataraman’s (2000) core idea that external conditions
can be as important as the agent. The disciplines underpinning most entrepreneurship research –
psychology, sociology and economics – have an abundance of concepts and theories to describe
and explain the characteristics and behavior of human individuals and collectives. The same
cannot be said for the emerging artifacts that entrepreneurs create and the non-person factors that
feed into that process. Therefore, we focus our theory development on the more underdeveloped
topic of external enablers that entrepreneurial agents creatively or serendipitously benefit from.
We assume that actor-independent circumstances, sometimes with and sometimes without the
entrepreneurial agent’s perception and action, can affect entrepreneurial outcomes (Bunge, 1993;
Godfrey-Smith, 2003). Such circumstances include natural and artificial as well as physical and
socially constructed changes. We also assume that entrepreneurial agents lack full foresight and
rationality, that is, they have only a partial and fallible view of reality.
Third, in response to an emerging consensus and a major criticism of the Discovery
stream, our framework considers venture creation as a process (McMullen & Dimov, 2013;
Zahra & Wright, 2011). It does so primarily by distinguishing different roles external enablers
can have at different points throughout the venture creation process. Further, our framework
allows viewing the emerging venture as an evolving, malleable entity (Cornelissen & Clarke,
2010; Dimov, 2007; Furr, Cavarretta, & Garg, 2012).
Fourth, we adopt from Davidsson (2015: 683) the definition of external enablers as
“distinct, external circumstance[s]” that have “the potential of playing an essential role in
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eliciting and/or enabling a variety of entrepreneurial endeavors by several (potential) actors”. He
introduced this notion as an invitation to develop theory across technological, regulatory,
demographic, socio-cultural, macroeconomic, political, and natural-environmental changes.
External enabler is one of three constructs Davidsson (2015) suggests to jointly capture what
prior literature has mixed in a complex notion of “opportunity”. The other two are new venture
idea—the content of the “imagined future ventures” that entrepreneurs try to create—and
opportunity confidence—entrepreneurs’ subjective assessment of the extent to which an external
enabler or a new venture idea is a good basis creating a new venture. All three aspects—external
enabler, opportunity confidence and new venture idea—are important foci in studies of new
venture creation, but because our interest is in the comparatively neglected role of external
change in influencing venture creation, we focus on the external enabler construct.
According to Davidsson’s definition, external enablers are aggregate-level phenomena
from which multiple emerging ventures can benefit. Importantly, external enablers are not
favorable by definition for all ventures or for society overall. Rather, it is a theoretical
assumption that any change to the business environment is disequilibrating and therefore
favorable to some (potential) new ventures2. The fact that the status as enabler is based on a
theoretical assumption also means that they exist, and can be identified, without being acted
upon. However, ex ante their favorability for individual cases is “selective, interdependent,
subjective, uncertain, and only revealed through empirical analysis” (Davidsson, 2015: 683). In
2 Although seemingly stable external circumstances may also harbor unused potentials, we (more clearly than
Davidsson, 2015) delimit our focus to disequilibrating, environmental change. We argue that this—and historical
experience—makes the assumption of “enabler” status without action relatively unproblematic; for every change to
the business environment there are some conceivable ventures that could benefit from it to some degree.
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cases where an external enabler has potential for positive influence, this influence is neither
exhaustive nor deterministic. Reaping the benefit usually requires action, and making use of an
enabler is never a complete recipe for venture creation success.
While Davidsson (2015) defined the external enabler concept and argued its advantages
over the notion of objective, pre-existing and actor-independent opportunity, he left it to others to
act on the “need for conceptual development that classifies External Enablers theoretically” (p.
689). We continue where Davidsson stopped by developing the notions of characteristics,
mechanisms, and roles of external enablers.
Finally, the development or our framework has benefitted from analyzing both present
and absent aspects of theorizing in prior studies that address venture creation in response to
individual instances of external enablers without using that notion. Table A1 (Appendix)
summarizes our interpretations of a core selection of such studies through the lens of our new
framework. Although they may not have served as explicit sources of fundamental assumptions,
these studies provided inspiration by outlining a fruitful way of addressing the role of external
change for new venture creation without getting entangled in the conceptual and empirical
problems associated with the idea of complete, objectively pre-existing and actor-independent
opportunities. At the same time, their focus on a particular type of change—and usually also
single instance thereof—served as a stimulus to try to overcome this limitation by responding to
Davidsson’s (2015) call to theorize across seemingly different types of external change.
One of the studies (von Briel et al., 2018) explicitly applies Davidsson’s (2015) external
enabler construct and became our inspiration for the delineation of mechanisms. We extend their
work by moving beyond technological enablers alone and by discussing a broader set of
mechanisms, some of which were identified within the studies listed in Table A1. We also
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introduce characteristics of external enablers as an entirely novel dimension, and roles of
external enablers as a means to acknowledge the process dimension and to account for the
interplay between enabler and agent.
CHARACTERISTICS, MECHANISMS, AND ROLES OF EXTERNAL ENABLERS
Below we explain and discuss each element of our new framework, guided by the
graphical representation in Figure 1. The leftmost column lists types of external enablers.
Whereas prior research rarely reaches beyond mentioning types, we go further by developing
what we see as theoretically more promising notions of characteristics, mechanisms, and roles to
construct a framework that describes external enablers’ form, function, and influence on venture
creation. Before turning to these novel parts of the framework we briefly discuss the important
aspects of agency and context.
============================
Insert Fig. 1 about here
============================
Agency and Context
As indicated by the top panel in Figure 1, our framework fully acknowledges the widely
shared notion that entrepreneurship requires agency (e.g., Alvarez & Barney, 2007; Shane,
2003). Without agents’ initiative, external enablers cannot affect entrepreneurial action and
outcomes (Reynolds, 2005). Even serendipitous influence on outcomes (cf. below) requires that
the unaware agent initiated a venture creation attempt in the first place.
However, entrepreneurs cannot literally “create something from nothing” (cf. Baker &
Nelson, 2005; Ramoglou & Zyglidopoulos, 2015). We believe that our understanding of new
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venture creation benefits from attention to the “external raw material” that allows entrepreneurs
to do what they do, and expect users of our framework to apply existing theories and concepts
pertaining to agents when they apply it. Although our framework in its current form does not
introduce any genuine novelty on the agent side of the nexus, it arguably provides more room for
creativity than does Discovery Theory and greater acknowledgement of dispersed agency
(Dimov, 2007; Nambisan, 2017) than most other frameworks do. It also provides more room for
luck and serendipity by highlighting that external enablers sometimes exert influence without the
agent’s awareness (Denrell, Fang & Liu, 2014). We thereby allow for a less heroic view of the
agent than what is often implied in research using Discovery or Creation theories.
The bottom panel in Figure 1 acknowledges the importance of context (Johns, 2006;
Welter, 2011; Zahra, Wright, & Abdelgawad, 2014). External enablers occur and operate in a
context of existing circumstances, which we analytically construe as stable to give contrast to the
change represented by the enabler. In this sense, external enablers are relational. For example,
the enabling potential of a globally available new technology will vary across spatial contexts
depending on, for example, the status of human capital, macroeconomic conditions, and
regulatory environments in the contexts in question.
Some of the challenges and research opportunities offered by our framework thus
concern how entrepreneurial agents strategically or fortuitously make use of the potential
provided by external enablers, and how enablers and their effects interact with contextual factors.
Leaving deeper exploration of these important questions to future research, we now turn to this
paper’s main focus, namely the grey-shaded areas in Figure 1.
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Characteristics of External Enablers
Characteristics refer to the basic nature of an enabler—the salient properties that describe
its structure and form. We construe such characteristics of enablers as intrinsic to them; they do
not vary across the agents who might benefit from them. However, perceptions of them may
vary, as does their potential influence on particular attempts to create ventures (i.e., a given
characteristic may be differentially beneficial). As intrinsic properties of external enablers,
characteristics are aggregate-level constructs; however, variations in these dimensions are
relevant on the level of individual ventures because agents’ alertness, knowledge, luck, and effort
in relation to them can be important to particular new ventures’ development and success. We
discuss two characteristics—scope and onset—along which external enablers’ actionability and
market potential may vary. We identified these characteristics through our own analysis of
how—across types of external change—instances of change are similar or different, and how this
might matter to emerging new ventures.
The Scope of External Enablers. Scope is a theoretically important characteristic of
external enablers primarily because it affects the market potential of the ventures created in their
wake3. Scope has important implications for the strategic ambitions, timing and scaling
decisions, and eventual outcomes of emerging new ventures.
Within and across the types of enablers there is variation in sectoral, spatial, temporal,
and socio-demographic scope. Sectoral scope concerns the range of industries that an external
3 Prior literature occasionally discusses the importance of scope of the new venture idea (Davidsson, Hunter, &
Klofsten, 2006) or of patents (Shane, 2001) but not at the level or with the sub-dimensions developed here. The
notions of “scope” and “magnitude of impact” were listed independently (but not discussed in depth) by Dutton and
Walton (1989: 383) in a compilation of dimensions of what they call “strategic issues”.
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enabler may affect. Spatial scope refers to the geographic area the enabler affects. Figure 2
illustrates variance in scope by locating several external enablers according to these two
dimensions. For example, the deregulation that made possible satellite radio in the US (Navis &
Glynn, 2010) has limited scope on both dimensions. Legalization of marijuana in individual US
states (March, Martin, & Redford, 2015) has even less spatial scope (although customers and
goods may find their way across borders). Lesser still is the spatial scope of Shepherd and
Williams’ (2014) wildfire disaster, although it may have enabled start-ups beyond social
ventures related to disaster relief (e.g., products and services oriented toward future fire safety).
The Bayh-Dole Act (Shane, 2004) was country-specific and restricted to industries that can
benefit from intellectual property protection.
============================
Insert Fig. 2 about here
============================
Temporal scope refers to the duration of enablement, that is, for how long the change has
significant effects. For example, global warming is predicted to affect economic life for
generations, whereas the influence of El Niño/La Niña is cyclical. The temporal scope of new
technologies can vary dramatically and may be difficult to assess because technological progress
cycles tend to make incumbent technologies obsolete (Tushman & Anderson, 1986) or at least
alter the identity of technology fundamentally over time (Ekbia, 2009; Faulkner & Runde, 2009).
Regulatory changes can also have an uncertain temporal scope. For example, variance in the
anticipated temporal scope of regulatory changes like tax cuts has important effects on consumer
behavior (Katona, 1975), and such variance is therefore likely to have effects on entrepreneurial
activity as well. Finally, socio-demographic scope pertains to the range of individuals whose
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circumstances are potentially affected by the enabler, from “all human beings” to niche groups
like schoolchildren of a particular age or people with a particular disability.
In sum, the scope of external enablers varies across at least four dimensions: spatial,
temporal, sectoral and socio-demographic. This variance matters to individual ventures because
the scope of enablers can affect the market potential for ventures that try to benefit from them.
Scope also matters to policy-makers and their efforts to leverage enablers because the scope
affects the amount of entrepreneurial activity that an external change can facilitate.
The Onset of External Enablers. Existence of an enabler does not equate perception or
recognition, so alertness (Tang, Kacmar, & Busenitz, 2012), knowledge (Shane, 2000), or even
luck (Denrell et al., 2014) related to the identification of the onset of external enablers have
strong implications for their timely adoption into new venture ideas and for these ventures’
eventual outcomes. For example, how enablers first come into being influences the feasibility of
proactive behavior and the attainment of first- (or later-) mover advantages (Lieberman &
Montgomery, 1998). This makes two dimensions of onset—suddenness and predictability—
conceptually useful in theorizing about external enablers and their recognition by agents of new
venture creation.
Not all enablers qualify as sudden environmental jolts (Bradley, 2015) or other
punctuated events; some, like climate change and most social movements, develop in a slow and
measured manner. Hence, suddenness is one strategically relevant dimension of variance. Onset
can also vary according to its predictability, that is, the extent to which an enabler’s presence and
influence can be anticipated (Miller & Lin, 2015). For example, the expiration of key patents is
known well in advance, whereas most natural disasters are unpredictable. Recurring events like
business cycles and weather systems are more predictable than changes that do not follow a
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cyclical pattern, even if the exact turning points may be hard to predict. Figure 3 positions a
selection of external enablers according to suddenness and predictability.
============================
Insert Fig. 3 about here
============================
Demographic shifts like an ageing population are examples of changes that are both
gradual and predictable. Terrorist attacks and political upheavals (in otherwise stable
environments) are the opposite. It is difficult to prepare for these latter kinds of event in detail,
but they can be exploited by entrepreneurs who swiftly introduce products that appeal to
associated fears and sentiments (Ramoglou & Tsang, 2016). Thus, an unpredictable onset may
favor agile start-ups over more slow-moving incumbents (Bradley, 2015). The example of
marijuana legalization as predictable but sudden assumes a stable political environment and an
overt, publicly discussed process leading to the decision. However, the formal introduction is
sudden, as what is illegal one day is legal the next. Our depiction of social movements as gradual
and unpredictable assumes uncertain development paths and uncertain effects in particular
environments (Hiatt et al., 2009). For example, the drift of veganism into the mainstream would
have been difficult to predict two decades ago and its status may still be uncertain in the long
term (Castricano & Simonsen, 2016).
In sum, the onset of external enablers varies in suddenness and predictability. This
matters to individual ventures because readiness to benefit from their appearance has
implications for the design of organizational strategy and structure, and variance in onset has
implications for new ventures’ likelihood of being able to compete successfully against
incumbent firms (cf. Eckhardt & Shane, 2003; Jennings and Seaman, 1990).
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Mechanisms of External Enablers
Characteristics are useful for capturing the nature of external enablers, but they describe
form, not function. That is, they do not detail the influence enablers have on entrepreneurial
action and outcomes. We suggest theorizing the detailed influence as mechanisms, based on our
belief that it is more fruitful to apply the idea of real but unactualized potentials to mechanisms
that provide partial enablement than to complete but empirically non-tractable “opportunities”
that are defined dichotomously by their potential for generating profit or not (Ramoglou &
Tsang, 2016).
The mechanisms of external enablers explicate how they can facilitate the initiation,
ongoing development, and success of new business ventures. How mechanisms work often but
not always requires premeditated action; occasionally, emerging ventures benefit from enablers
and their mechanisms without the entrepreneurial agents’ full awareness. Further, unlike
characteristics, mechanism is a relational construct, providing a means to connect external
elements and the entrepreneurial agent in the spirit of Shane and Venkataraman’s (2000) original
nexus idea.
Enablers afford potential for eliciting certain mechanisms and not others, but these action
potentials can only be actualized in particular (categories of) ventures. Thus, whether an enabler
in fact provides a particular mechanism depends both on the enabler and the venture. Depending
on what they are and what they are trying to achieve, some ventures can and some cannot benefit
from a mechanisms that an enabler is inherently capable of providing. Conversely, no ventures
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can derive a particular mechanism from an enabler that does not have the inherent capacity to
provide that mechanism4.
Moreover, mechanisms can produce secondary effects by interacting with other
mechanisms. This is important because external enabler is a composite-level aggregate construct
in its own right. Further, in accordance with our assumption that enablers are favorable to some
but not all new ventures, mechanisms influence the likelihood of an effect but are not necessarily
sufficient for it to materialize (Hedström & Ylikoski, 2010). As we explain in the discussion of
roles below, the mechanisms of external enablers can also operate at various stages of venture
creation.
A collection of enabling mechanisms in venture creation is displayed in Table 1. The first
six mechanisms in the table were first suggested by von Briel et al. (2018), while the remaining
mechanisms and their definitions, as well as other elaborations, were compiled and/or developed
specifically for this paper, in some cases inspired by the research summarized in Table A1
(Appendix). From top to bottom, the list largely runs from mainly supply-related mechanisms to
mainly demand-related mechanisms, with the Enclosing mechanism adding the issue of value
appropriation. None of the mechanisms reflect ideas that cannot be found in existing literatures.
However, compiling them and discussing them jointly as enabling mechanisms can enhance the
value of these ideas.
4 We use the language of mechanisms in much the same way as do scholars who research the microfoundations of
strategic change and action (Davis & Marquis, 2005; Felin & Foss, 2005) as a way to describe underlying cause-
effect relationships (Gross, 2009). Mechanisms are not necessarily directly observable but can be identified through
their primary effects (Gross, 2009; Hedström & Ylikoski, 2010). By assuming that mechanisms are empirically
tractable, we take a more rigorous stance on mechanisms than does critical realism (Berglund & Korsgaard, 2017).
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============================
Insert Table 1 about here
============================
The distinction between characteristics and mechanisms of external enablers is important
because it increases the potential for flexible and nuanced theorizing. It allows incorporating
dynamism and relationality rather than static determinism into explanation or analysis:
seemingly different types of changes to the objective business environment can provide
conceptually similar mechanisms. For example, compression mechanisms can be derived not
only from time-saving technologies with particular characteristics (e.g., 3D printers for rapid
prototyping) but also from regulatory reforms that cut “red tape” (e.g., quick approvals of
venture creation initiatives). Likewise, the same two types of enabler also have the potential to
provide enclosing mechanisms, enhancing the venture’s repeat sales, market share, and/or profit
margins (cf. Amit & Zott, 2001).
The combination mechanism combines and arranges multiple elements. Von Briel et al.
(2018) mention the example of how hardware start-ups can leverage smartphones, tablets, and
portable devices to extend their own market offerings’ functionality. Amit and Zott (2001) report
other technology-related examples such as chat rooms offered by online auction platforms (as
“complementarities”). A natural disaster enhancing local human (volunteer) resources as well as
inflow of external resources which combine to produce effects (Shepherd & Williams, 2014) can
be seen as a non-technological example of this mechanism. Uncertainty and legitimacy are core
concerns in new venture development (McMullen & Shepherd, 2006; Navis & Glynn, 2010), so
reducing the former and increasing the latter can be important mechanisms provided by external
enablers (cf. Hiatt et al., 2009; Sine & Lee, 2009).
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Across the examples in Table 1, it is important to realize that all mechanisms,
independent of effect, share several general characteristics. First, enablers need not be socially
beneficial in general in order to provide mechanisms that are favorable to individual ventures
(Davidsson, 2015). Hiatt et al. (2009) illustrated this with the temperance movements’
unintended effect on increasing the number of producers of (sugary) soft-drinks. Likewise, social
networking platforms offer unparalleled connectivity and expand access to knowledge, social
and financial resources especially during initial stages of venture creation (Bruton et al., 2015),
but their information quality, privacy, and security are widely debated (Turban et al., 2011). In a
similar vein, economic downturns can shift demand patterns to benefit emerging ventures that
offer little treats (e.g., drugs, snacks, candy, and local pastimes) when consumers feel that
substantial treats like home improvements, a new car, and international travel are out of reach.
Second, the beneficial mechanisms an enabler can provide for specific purposes are in
some cases rather obvious whereas in other instances only individuals with specialized
knowledge and/or extraordinary imagination can foresee the benefits. We refer to this as the
opacity of the mechanism. Third, in some situations enabling mechanisms can enhance outcomes
without premeditated action, as when man-made calamities like 9/11 or the Fukushima nuclear
disaster boost demand for tough-environment robots5. Conversely, the potential of some enablers
for particular purposes may not only be hard to identify; it may also require considerable
ingenuity, tenacity and willingness to bear the risk to embark on a time- and resource-consuming
process of actualizing that potential. We refer to this as the agency-intensity of a mechanism,
5 This example was inspired by an address by robotics professor and entrepreneur Rodney Brooks, March 29, 2017,
which also illustrated technological, demographic and socio-economic enablement of robotics ventures.
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adapting a term used by Ramoglou & Tsang (2016) as a dimension along which they argue that
“objective opportunities” vary (cf. Davidsson, 2017).
In our framework, opacity and agency-intensity are relational qualities of mechanisms. In
every situation, some agents would be better than others at identifying an enabler’s potential
mechanisms and/or require less time, effort and resources to make the enabling effect
materialize. But it is also the case that across enablers and their mechanisms some are more
difficult to conceive and/or realize than others even for the most apt agents. Hence, with respect
to specific use for specific ventures, some enabling mechanisms are more opaque and/or have
higher agency-intensity than others. Moreover, these dimensions may be orthogonal: obvious but
hard to realize and hard to see but easy to implement are both possible situations.6
Variance in opacity and agency-intensity is strategically important. Exploiting opaque
mechanisms with high agency-intensity may be associated with high risk but also high potential
reward due to absence or slowness of competitive response, whereas somewhat opaque
mechanisms of low agency-intensity can benefit unaware but lucky agents just as much as those
who cleverly foresaw the beneficial mechanisms.
In summary, mechanisms of external enablers specify the benefits derived from them.
The delineation of specific mechanisms in this context allows pursuing questions like “What
type of benefits can enabler X offer to different types of emerging ventures?” and “What
6 A similar logic is also evident when examining the action potentials that technological objects can afford –
enactment of an affordance requires realization of the action potential plus some rational, goal-directed decision to
actualize it (Strong et al. 2014). Opacity and agency-intensity refer to the same logics but are not bound to
mechanisms provided by technological or other material objects only.
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enablers can offer mechanism Y, which venture Z needs?”. This makes the notion highly useful
for both researchers and practitioners.
Roles of External Enablers
Our portrayal of characteristics and mechanisms does not specify when in the process
external enablers influence particular ventures. Therefore, we introduce the notion of roles to
conceptualize external enablers’ higher-order functions at different stages of new venture
development. Derived from lower-order mechanisms, roles are also inherently relational and
encapsulate both the type and the scope of enablers. We discuss three prominent roles that are
particularly illustrative of the gestalts of influence: triggering, shaping, and outcome-enhancing.
The Triggering Role. One major function of external enablers is to entice prospective
entrepreneurs to initiate the creation of a new venture because they more or less correctly
anticipate some (but not necessarily all) of the mechanisms those enablers can provide. This
triggering role is probably the most thoroughly examined in prior research due to the Discovery
Theory stream’s emphasis on recognition and evaluation of pre-existing entrepreneurial
opportunities (e.g., Baron, 2006; Grégoire et al., 2010; Grégoire & Shepherd, 2012; McMullen &
Shepherd, 2006; Shane, 2000; Wood & Williams, 2014). This research has firmly established the
importance of agents’ prior knowledge but offers less in terms of non-obvious and generalizable
insights about how qualities of “opportunities” themselves influence triggering (Davidsson,
2015). Therefore, the triggering role is well worth revisiting through the lens of external enablers
and their mechanisms. Our theorizing suggests a focus on anticipation of partial enablement
associated with the identification of specific mechanisms rather than assessments of the profit
potential of complete, pre-existing “opportunities”.
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The Outcome-Enhancing Role. One key premise of our framework is that, when
successfully activated, the mechanisms in Table 1 contribute to better outcomes than the
emerging venture would experience had it not benefitted from the mechanisms in question7.
However, successful activation of enabling mechanisms is sometimes fortuitous rather than
strategic. A sole focus on anticipated mechanisms leads to neglect of other effective mechanisms
that nonetheless contribute to a better outcome. Therefore, the distinction between the triggering
role and the outcome-enhancing role allows scholars to develop answers to some of the
theoretically and practically most important questions in entrepreneurship: “What ‘opportunities’
tend to go undetected?” and “When and to what extent can entrepreneurs identify the reasons for
their own success?”
The distinction we offer helps in separating necessary from sufficient conditions and in
accounting for success and failure and any dynamic shifts between them. For example, analyzing
the dialectics between existence and activation of external enablers—as in the enablement of
prospecting to identify market needs and the later enablement of development and production of
offerings that fulfill these needs—may provide a new lens to theorize about the “valley of death”
phenomenon that surrounds this transition in many sectors (Barr et al., 2009).
Table A1 (Appendix) demonstrates that prior research rarely distinguishes between
triggering and outcome-enhancing roles. Yet doing so would draw attention to the possibility of
7 We speak generally of ‘outcomes’ because, under the view that entrepreneurship is about new venture creation, the
most relevant outcome is whether or not the process leads to a viable new venture, not its financial performance
beyond that point. However, we refrain from specifying a narrowly defined outcome variable as the only right
alternative and encourage viewing outcome as a continuous or even aggregate variable when applying our
framework.
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systematic overweighting and underweighting of enabling mechanisms in triggering (and
shaping, see below) relative to their effects on outcomes. The progress psychology has made on
cognitive biases (Kahneman, 2011) suggests that such a bias is highly likely in entrepreneurial
decision-making. Our framework allows for domain-specific theorizing about this possibility,
rather than just application within the domain.
The Shaping Role. Between initial triggering and eventual venture creation outcomes,
creative agents can use available external enablers to their emerging ventures’ benefit in any
number of ways at different points during the venture creation journey (McMullen & Dimov,
2013). We conceptualize this influence as the shaping role, which has three different
manifestations. Although these three facets of shaping often appear together in empirical cases, it
facilitates theoretical precision to separate them conceptually.
First, enablers can help shape the emerging venture’s product or main market offering, as
when new technology allows adding entirely new functionality (von Briel et al, 2018), a social
movement inadvertently stimulates start-ups around an alternative product category by reducing
the social legitimacy of an existing one (Hiatt et al, 2009), or a natural disaster defines the very
purpose of the venture and its services (Shepherd & Williams, 2014). Second, enablers can help
shape the venture itself, as when technologies, regulations or the evolving start-up culture and its
institutions (a type of social movement) influence how the venture is resourced, how boundaries
are set, where agency is located, and how exchange is organized (e.g., Amit & Zott, 2001).
Third, external enablers can shape the venture creation process without leaving visible traces on
the venture or the market offering that eventuates. For example, technologies and regulatory
changes can make the creation process faster and cheaper (von Briel et al., 2018). Seemingly
negative shocks like natural disasters, war, terrorism, and political upheaval can delay the
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venture, occasionally leading to pure cases of process-only enablement by fortuitously improving
the timing of the introduction of a product.
The conceptualization of a shaping role by external enablers is an important step forward
in entrepreneurship research. By portraying salient external conditions as complete, pre-existing
packages (opportunities) that are either discovered or not at the outset of the process, Discovery
Theory almost completely neglects the shaping role (cf. Dimov, 2007; Korsgaard, 2013). Our
framework highlights that all relevant enablers do not necessarily exist at the outset of the
process and that, if they do, the agent may not realize their potential and make strategic use of
them until later in the process (e.g., when opacity or agency-intensity decreases for some reason).
This also extends interest on the agent side from prior knowledge to process-specific learning
and potential knowledge contributions by several individuals (Dimov, 2007).
The more agentic-dynamic alternatives (e.g., Alvarez & Barney, 2007; Ardichvili et al.,
2003; Cornelissen & Clarke, 2010; Dimov, 2007; Sarasvathy, 2001; Wood & McKinley, 2010)
pay attention to dynamism but with only scant attention to the influence of external factors. By
emphasizing the shaping role, our framework allows such approaches to expand the analysis of
how entrepreneurs creatively identify and realize possible mechanisms of external enablers in a
variety of ways throughout the venture creation process, thereby counteracting a main criticism
against this line of research (Ramoglou & Zyglidopoulos, 2015).
In sum, paying attention to roles of external enablers emphasizes the process nature of
new venture creation as well as the imperfect relationship between strategic action (as revealed
in triggering and shaping) on the one hand, and outcomes on the other. It thereby offers a less
overstatedly heroic view of the actor than either of the currently dominating alternatives. At the
same time, it opens up for more detailed theorizing about the interplay between agency and
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external circumstances than the coarse-grained notions of “discovery” and “exploitation” of
(already complete) “opportunities”.
DISCUSSION
Existing frameworks do not easily accommodate a focus on external elements’ influence
on venture creation. Lacking the appropriate conceptualizations for such a mission, research has
left considerable gaps in our theoretical understanding of important phenomena as well as in the
theoretical toolbox that is available for use in the conception and design of empirical research
projects.
In this paper we develop a framework to help fill this gap by fully developing the
perspective offered by the external enabler construct introduced by Davidsson (2015). Starting
with the characteristics of external enablers, we develop conceptualizations that highlight that
different types of enablers can have similar scope and onset, whereas enablers of the same type
can differ markedly in these respects. Variance along these dimensions and their sub-dimensions
has implications for entrepreneurs’ prospects for strategically using enablers in advantageous
ways and for their ventures’ market potential. These strategic implications make those concepts
and dimensions useful for both theoretical and practical purposes. To the best of our knowledge,
this perspective is entirely novel. We have not found any similar attempts at identifying and
describing strategically salient dimensions of variance in enablement-potential for new venture
creation across different types of changes to the economic environment.
Analysis of the possible effects of external enablers led us to delineate a set of
mechanisms by which these enablers can facilitate venture creation. Successful activation of
mechanisms—whether strategic or fortuitous—will affect venture outcomes, making the
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conceptualizations both theoretically and practically valuable. This part of our framework
consists mainly of a compilation and framing of existing ideas for the purpose of facilitating
more productive approaches to theorizing the impact of external factors in new venture
development. Analysis on the mechanism level can arguably yield much deeper and precise
insights than a discussion on the coarse-grained level of types of enablers. Our mechanism-based
approach offers theoretical flexibility, as different types of enablers can provide similar
mechanisms while enablers of the same type can offer different mechanisms. It is also possible
that the same enabler can offer several mechanisms to a given venture or different mechanisms
to different ventures (as is demonstrated, for examples, in the idea of “innovation wakes” that
were enabled through the emergence of 3D printing technology, Boland et al. 2007),
emphasizing the theoretical importance of looking beyond the mere presence of particular
enablers or indeed beyond the single venture. Further, we discussed how the opacity and agency-
intensity of particular mechanisms for particular ventures influence the strategic action potential
associated with their use.
In terms of roles, external enablers can affect the triggering (initiation) and the outcomes
of venture creation attempts differently. This distinction is not new to social theory (e.g.,
Hammond & Stewart, 2001) but important and previously overlooked in the Discovery Theory
stream. We believe this distinction holds considerable promise of unveiling non-obvious but
teach- and learnable insights. Therefore, the distinction between triggering and outcome-
enhancement should have high priority in future research agendas. Between triggering and
outcomes, our framework also draws attention to external enablers’ shaping of a venture’s
market offerings, the structure and operations of the venture itself, and the process of its creation.
Situating the effects of mechanisms over time through attention to the shaping dimension can
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add dynamism and agency-dependency that has been lacking in research on the influence of
external circumstances. To the best of our knowledge, our delineation of shaping roles is also a
new perspective.
In discussing the perspectives on new venture creation proffered by our external enabler
framework, it is helpful to describe some key boundary conditions of our theorizing – why focus
solely on the enabling side of external change, what is not an external enabler, and what are the
relationships between several external enablers?
The notion of external enablers, at face value, may suggest that objective, external
factors—sometimes the same factors in relation to other ventures (see Hiatt et al. 2009)—may
also work as “disablers”. Yet, our conceptualization of external enablers is not tied to a
qualification into “positive” or “negative” changes. It merely states that any disequilibrating
change can enable some entrepreneurial initiatives. Moreover, while “negative” and “positive”
changes can be regarded as symmetrical for incumbent firms and their current products and
markets, not-yet-existing ventures are not committed to particular products and markets, making
disablers irrelevant rather than negative in relation to the course of action they choose. This
justifies an unbalanced focus on enablement. In effect, the notion of external enablers negates the
possibility of disablement as a general characteristic of an external change. It is both a realistic
and pragmatic perspective that any change may elicit entrepreneurial action while nothing (short
of a large enough asteroid hitting the Earth) renders entrepreneurial action impossible by
definition. Whether the proportion of the universe of not-yet-existing ventures that could benefit
from a particular external change is 1% or 99%, this is the part of the population to which our
framework applies. A different framework would be needed for analyzing external obstacles to
the same set of (emerging; potential) ventures.
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Regarding what is and is not an external enabler we limit our use to instances of external
change, because this is where the assumption of enablement for some entrepreneurial purpose is
easily defended. This also delimits a theoretically and practically more useful domain for the
enabler construct. Having identified a significant external change, theorists or practitioners
equipped with our notions of characteristics, mechanisms, and roles have something useful to
look for. Staring into a grey wall of non-change they might not, as there is no contrast. However,
issues of magnitude and time admittedly raise definitional issues. In reality no dimension of the
environment is ever entirely stable, so how much change is needed in order to qualify? Further,
how long time can elapse after the change has occurred before it is no longer change but
stability? There can be no unambiguous cut-offs. However, this element of fuzzy boundaries is
something the enabler construct shares with many other highly useful constructs. For example,
careful analysis would show that it may be difficult to exclude today’s edition of a newspaper as
an instance of “innovation” based on a literal reading of many attempts at formal definitions of
that construct. We would argue that the fuzzy boundaries of what is an “entrepreneurial enabler”
have limited implications for the construct’s usefulness for research and business practice. This
conceptual imperfection is not even remotely close to matching the conceptual problems
pertaining to “entrepreneurial opportunity” (Davidsson, 2015).
Further, because we focus on partial enablement—potential for better outcomes than in
the absence of the enabler—the distinction between enablers and “non-enablers” is less critical
than the corresponding distinction for “objective opportunities” which relies on ex ante presence
or absence of potential for profit (Ramoglou & Tsang, 2016). Enablement is a matter of degree;
our framework takes an interest in change with impact of varying magnitude; that it theoretically
allows for external changes of extremely limited scope is hardly a problem because neither
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researchers nor practitioners are likely to spend much energy on these instances. It should be
noted, however, that reserving the label “external enabler” for instances of change does not
eliminate the possibility that seemingly stable conditions also harbor unused potential for venture
creation enablement, or that entrepreneurial agents may find them. But we do not have
theoretical justification to label such instances “external enablers.” External enablers earn their
status as such ex ante by constituting indisputable instances of external change and by the
theoretical assumption that such changes always have the potential of benefitting some ventures
to some degree, not ex post based on evidence of actual influence on particular cases.
Another point of discussion relates to the relationships of enablers to each other. For
clarity of exposition, we have discussed characteristics, mechanism, and roles—and various
attributes of these—largely one by one. In reality, there are many potential relationships within
and across these conceptual categories. Although a comprehensive treatment of this is beyond
the scope of this paper, a few remarks and observations may serve as inspiration and guidance
for future refinement and elaboration. First, a given enabler can offer several mechanisms and
play multiple roles with respect to a single venture. It can also provide different mechanisms and
roles across different ventures. However, we hold that there are objective limits to the versatility;
not all enablers can provide a given mechanism, and (the agent of) a given venture cannot make
any enabler play a particular, desired role.
Second, although we maintain that theorizing across types of enablers is valuable, Figure
2 suggests that an external enabler’s scope is often linked to its type. For example, technology
enablers often have broad scope along both sectoral and spatial dimensions, whereas regulatory
changes typically remain relatively restricted spatially and often sectorally as well. Such type-
characteristic relationships may deserve attention in future work.
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Third, one enabler can cause another to occur, as when social movements trigger changed
legislation (Hiatt et al., 2009; Sine & David, 2009). Alternatively, different enablers may have to
interact in order to produce effects. Von Briel et al. (2018) suggest this was the case with a
number of digital technologies co-eliciting a surge in IT hardware start-ups. Across types,
regulatory change may be triggered by the appearance of new technology, and the two changes
in combination can provide enablement to a much greater extent than either one of them could do
without the other. Engaging the whole framework at once, we might imagine the broad scope of
a demographic shift enticing an entrepreneurial agent (triggering role) to search for technological
enablers that can play product- and process-shaping roles through compression, conservation,
and generation mechanisms (saving time and money in development of products that offer new
functionality; i.e., product- and process-shaping roles) applied to a range of products targeted at
senior citizens and their particular needs—and eventually be awarded with a better outcome than
what would have been possible without these enablers (outcome-enhancing role). Again, these
are merely a few examples to serve as guidance and inspirations for future research.
IMPLICATIONS
Our work was motivated by the desire to develop a comprehensive, alternative
perspective to opportunity-focused discovery and creation views of entrepreneurship that lends
itself more readily to further theory development and empirical research. We believe our
framework of external enablers, their characteristics, mechanisms and roles achieves this purpose
and in so doing mitigates some of the well-documented criticisms associated with the existing
perspectives. We discuss these in turn.
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Generating knowledge about how external, actor-independent factors enable
venture creation. The originators’ descriptions of Discovery Theory (Eckhardt & Shane, 2010;
2013; Shane, 2003; Shane & Venkataraman, 2000) assume or strongly imply a range of
problematic notions, such as: (1) all conditions that are important to the venture’s success
chances exist at the outset of the process rather than emerging during it; (2) entrepreneurs’
success is due to correct identification of these conditions at the outset (rather than to later
insights or the luck of benefitting from unperceived factors); and (3) the difference between an
infinitesimal profit and an infinitesimal loss is somehow more important and interesting than
outcome differences along other dimensions and at other points of the outcome spectrum (cf.
Ramoglou & Tsang, 2016). The notion of pre-existing, objective opportunities has been found to
be conceptually debatable and empirically elusive, leading to limited theoretical development
and an empirical stream developing knowledge about what underlies conjectures about
opportunities rather than about characteristics of opportunities as defined within the theory, that
is, conditions that facilitate a profitable outcome (Eckhardt & Shane, 2013).
For researchers with a strong belief in the importance of external, actor-independent
factors our framework demonstrates the advantages of disconnecting that interest from the notion
of “objective entrepreneurial opportunity”. Doing so circumvents problematic assumptions and
converts the diffuse notion of favorability of opportunities into more concrete and workable
characteristics and mechanisms of external enablers, situated in the venture creation process by
the roles they take or are assigned. This, we argue, provides theorists with more workable
assumptions and empirically fertile concepts than previously offered. The only assumptions
made are that disequilibrating external changes have the potential of facilitating some new
ventures and that when particular ventures benefit from one or more enabling mechanisms, this
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improves their outcomes and therefore probabilistically increases their chances of success. These
assumptions are weak and comparatively unproblematic.
Our framework also demonstrates that a theoretical interest in external factors is fully
compatible with a dynamic, relational and evolutional view of how new ventures come into
being. In our framework, the presence of one or more external enablers does not guarantee that a
particular venture will enjoy any enabling mechanisms from them, and if enabling mechanisms
are present, there is no guarantee that they will suffice to bring the venture creation process all
the way to a successful conclusion. This perspective suggests a reasonable role for objective,
environmental conditions and forces a deep analysis of how they contribute to venture
development.
Attuning to dynamism, process and change. The Discovery Theory research paradigm
has become almost entirely focused on the earliest stage of venture creation, that is, the
recognition, identification, discovery and/or evaluation of researcher-generated descriptions of
potential opportunities in laboratory/experimental settings (e.g., Grégoire, Barr, & Shepherd,
2010; Grégoire & Shepherd, 2012; Wood & Williams, 2014). Although this research stream has
been successful, it blinds the analysis to the possibility of significant external conditions that
emerge and/or are identified and brought to use only at a later stage of the venture development
process. By assuming that entrepreneurial agents correctly perceive the external reasons for their
eventual success ex ante, the theory disregards the possibility of unanticipated and fortuitous
influences on outcomes, i.e., luck (cf. Denrell et al., 2014).
Our framework triggers no need to sample or create (in laboratory research) entities that
satisfy a definition of “opportunity”. Research using the framework can start from identification
of one or more enablers and use these as study context and/or for sampling/case selection, but
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this is not the only conceivable approach (Davidsson, 2015). Using any set of emerging ventures,
studies can inquire into the presence and intensity of mechanisms of external enablers (with or
without tracing what the specific enablers were) at various stages of venture development, either
in retrospective or (preferably) prospective designs. In experimental conditions, researchers
could probe whether enabling artefacts inserted at particular stages of venture creation indeed
provide particular mechanisms we expect from them. For example, consider new venture teams
that are given “free access” to crowdfunding platforms whilst they develop a financing plan.
Researchers could study whether they pivot from their originally planned financing strategy to
understand whether crowdfunding platforms providing expansion mechanisms indeed take on a
(venture) shaping role. Along similar lines, the research can probe into triggering and additional
shaping roles of external enablers at different points of the process. These data can then be
related to over-arching outcomes at a later point in time, and results compared to theoretical
predictions.
On the agent’s side, a shift from objective, pre-existing opportunities to partial
enablement at various points of the venture creation journey encourages a corresponding
broadening from the productive but narrow interest in a single individual’s prior knowledge (see,
e.g., Grégoire et al., 2010; Grégoire & Shepherd, 2012; Wood & Williams, 2014) to encompass
consideration of process-specific learning and knowledge contributions from multiple
stakeholders at multiple points in time (cf. Dimov, 2007). One such example would be the
identification of when and how entrepreneurial agents realize the action potential of somewhat
opaque enabling mechanisms, and when and how a ‘tipping point’ in agency-intensity for
mechanism activation might be reached or surpassed. Both are ultimately empirical questions.
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As a counterpoint to exaggerated subjectivism and possibilism, discovery theorists have
been justified in their insistence on the importance of objective, external factors (Eckhardt &
Shane, 2013; Ramoglou & Tsang, 2016; Shane, 2012). For subscribers to more dynamic and
agentic theories like Effectuation Theory and varieties of Creation Theory (e.g., Alvarez et al.,
2013; Sarasvathy, 2001; Wood & McKinley, 2010), our framework avoids the conclusion that
absence of ready-to-use opportunities means that search has little meaning (Alvarez & Barney,
2007). Our framework provides tools for incorporating systematic attention to external factors
without sacrificing emphases on dynamism and agency.
In fact, our framework marries these ideas by highlighting the theoretically
underdeveloped topic of external enablement while recognizing that—apart from the special case
of fortuitously benefitting from unobserved enabling mechanisms—the agent’s perception and
action is still needed for any enabling potential to be realized. For the most part, mechanism are
not activated or assigned to roles without an agent’s creativity and deliberate action. Our
framework thus provides Creation Theory-inspired research with material for analyzing how
entrepreneurs—perhaps “expert entrepreneurs” in particular—identify enablers and their
mechanisms and use them throughout the venture creation process. Although our framework is
not construed specifically as “process theory” in a narrow sense (Langley et al., 2013; McMullen
& Dimov, 2013), its elements are action-centric rather than agent-centric and should be useful
also for process-theorizing purposes (Pentland et al. 2017).
Providing a generalizable language capable of theoretical integration. Our
framework is intended as an invitation to theorize across different types of environmental
change, and to link changes at this level to the development of individual ventures. Looking
beyond Discovery and Creation literatures, there are existing conceptualizations with some
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capacity for such a purpose, notably the notions environmental jolt (Bradley, 2015) and
institution[al change] (Meyer, 2008). Although research around these notions mostly focuses on
external changes as threats to inert incumbents, there are some interesting applications to new
venture creation research (see Table A1, Appendix).
We argue that for venture creation research, our framework has several advantages over
these notions. First, research in these streams tends to be geared toward aggregate-level analyses
(see Table A1) rather than developing knowledge applicable to the level of individual ventures.
Our notions of mechanisms and roles address the venture level. Our framework thus offers
avenues to link aggregate-level, disequilibrating changes to venture-level activity and back to the
aggregate-level outcomes of the change (cf. Coleman, 1990; Kim et al., 2016). Institutional
Theory has some capacity for the same (cf. Hiatt & Sine, 2009; Weber et al., 2008) but there is a
strong tendency for the interpretations to end up in arguments about legitimacy, and like Aldrich
(2010: 330) we question whether a theory “originally used to explain the constraining influence
of institutional structures on human behavior” can provide all the right tools for micro-level
insights into new venture creation.
Second, such research typically focuses on single instances of a particular type of change,
leading to limited theoretical abstraction and generalizability8. Our framework invites research
comparing multiple changes of various types. Such studies could probe further into variance in
scope and onset as well as whether the particular mechanisms and roles provided are closely
related to the type of enabler or apply more generally. We also encourage such designs to include
enablers other than those that can comfortably be characterized as “jolts” or “institutional”. This
8 An illustrative example is Eberhart et al. (2017) whose hypotheses have the form “A lenient bankruptcy reform
will lead to X.”
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creates a less constrained theoretical domain and an impetus for finding broader generalities. We
therefore believe our framework can help join these somewhat scattered literatures and provide
researchers who are interested in instances of environmental change with improved structure and
language for theorizing across such instances. To demonstrate this potential, we have in Table
A1 re-conceptualized a variety of exemplary studies with a focus on the role of external change
using the language of our framework, demonstrating its potential for theoretical integration and
generalization.
Beyond entrepreneurship, strategy research streams on strategic issues and environmental
scanning took some early steps toward theorizing across categories of external change (e.g.,
Dutton et al., 1989; Hambrick, 1982; Jackson & Dutton, 1988). These streams currently seem to
be dormant or drifting toward an interest in the agent rather than the external changes themselves
(e.g., Miller & Lin, 2015). However, external changes are obviously as relevant to established
firms as they are to entrepreneurship, and exaggerated agent-focus may be as delimiting for
practically useful, theoretical progress. Therefore, we believe our framework can stimulate
renewed interest in external change also in strategy research, and provide conceptual tools that
are useful for theorizing about growth- and renewal-oriented strategies of established businesses.
Inviting a more diverse spectrum of empirical methods. One of the consequences of
the traditional, agent-focused perspectives on new venture creation has been an adherence to
methods and measures associated with social units of analysis – individuals, groups, and firms.
Our framework shifts the attention away from the actor by acknowledging that external
conditions can be as important as the agent, thereby giving more prominence to modes of inquiry
situated within the context of entrepreneurial action rather than focused on the attributes of the
agent as an actor. The notion of external enablement as a relational concept emphasizes patterns
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of action within venture creation: the role of external enablers can only be identified by
examining the mechanisms they exert at the various stages of venture creation. These actions are
bounded by the specifics of the context in which they occur (e.g., when, where, and who)
(Pentland et al, 2017). Thus, empirical methods with an emphasis on contextuality, action and
emergence – such as case research, ethnography or even action research – can receive more
prominence than to date (Suddaby & Bruton, 2015).
Moreover, the construal of our framework is empirically inclusive rather than restrictive.
Apart from inductive field research, it continues to support deductive, theory-testing methods. It
offers testable predictions about certain mechanisms and roles of particular types of external
enablers that lend themselves to operationalization and testing in experimental or survey-based
research. Importantly, such research does not need to start from researcher-identified external
enablers (as Davidsson, 2015, implies) but can proceed directly to stipulating (in experiments) or
asking about (in surveys) the presence of specific enabling mechanisms provided by some
external enabler. Attention to the shaping role invites such research to create multi-period
experiments and to design approaches to probing into how agents identify enabling potential in
external changes as well as for what purpose and when in the process they apply them. Large
data sets derived from government business statistics and the like are unlikely to provide direct
information on mechanisms and agency but can be used for testing, for example, how enablers
with varying scope and onset differentially affect start-up rates across sectors and regions. In
turn, our framework accommodates both the traditional modus operandi on theory-testing in
entrepreneurship studies and also invites design stimulating further theory development. As we
noted throughout, neither our description of characteristics nor mechanisms nor roles is likely
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complete, which invites in particular qualitative and longitudinal designs to probe, extend, refine
and evaluate the ideas presented in this paper.
Stimulating design and intervention
Lastly, our framework, while theoretical in nature, also proffers interesting practical
implications. The notion of external enablers joins several types of external change and gears the
focus of attention to their potential for venture creation, rather than their nature or type. Our set
of mechanisms along with their opacity and agency-intensity, as well as the specification of
roles, provide language that can guide identification and realization of the benefits a particular
enabler can offer for particular types of venture, for what purpose, at what stage of development,
and with what amount of effort, resource investment, and risk-taking. Starting from a particular
emerging venture, specification of desirable mechanisms can assist the search and identification
of the enablers that might provide them.
These features have interesting design implications, suggesting that our framework can
also be useful for the emerging interest in design-oriented entrepreneurship research (Sarasvathy
et al., 2008; van Burg & Romme, 2014), an approach whose practical allure has been
demonstrated by the widespread adoption of Osterwalder and Pigneur’s (2010) “business model
canvas.” For policy designers, the framework provides analytical tools to use in assessing the
likely consequences of societal changes on new venturing activity. More importantly, the
characteristics, mechanisms, and roles we discuss can be used to stimulate and evaluate the
design of regulatory changes that target sectors, regions, or stages of development. In education,
the framework can be used to identify enablers, assess their potential for entrepreneurial activity,
and discuss the actions needed to unleash that potential.
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CONCLUSION
In this paper, we fleshed out the perspective of external enablers into a well-developed
framework to offer a new vantage point for research into venture creation as an alternative to
established theories. Our framework is neither complete nor free of shortcomings. However,
because our framework connects previously disconnected elements into a holistic picture of
external enablers, it can stimulate further theorizing. For example, while our list of mechanisms
provides theorists with a first step in deepening the analysis of functional communalities across
various types of external enablers and the functions of any particular enabler, our selection of
specific mechanisms is tentative rather than definitive. In order to reach deeper in theorizing, we
also need additional insights into how enablers relate to one another and to agents in deriving
enabling mechanisms, and how enabling mechanisms combine in contributing to venture
creation success. Grégoire and Shepherd’s (2012) theorizing about the distinction between
structural and superficial alignment of elements of supply and demand is an example of a
promising type of theoretical development. We leave the elaboration of such possibilities to
future work, hoping it will gradually converge on a set of abstracted and powerful concepts with
well-known properties and interrelationships.
Limitations aside, to the best of our knowledge, no unified framework about external
enablers adapted to the purpose of venture-level theorizing has existed until now. We hope that
colleagues will find this new foundation useful in their venture creation research, based on its
conceptual advantages.
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APPENDIX
TABLE A1
Exemplary relevant background literature reinterpreted within our external enabler framework
Paper1 Study description Enabler type(s) Characteristics
2 Mechanisms
3 Roles
Eberhart
et al.
(2017,
OS)
Deductive, hypothesis-testing within an
institutional theory framework addressing effects
of a change in bankruptcy laws on the likelihood
that a) individuals file for bankruptcy, b) ‘elite
individuals’ found new firms, and c) these new
firms are “high growth”. Archival data.
Aggregate level cause and effect (Japanese
population � rate of (high-growth) start-ups).
Regulatory
change (more
lenient
bankruptcy law)
Gradual and predictable
onset (implemented
from 2000-2003) with
limited spatial (Japan)
but high temporal
(effective from 2003
on) scope.
Uncertainty/risk
reduction (eased
exit process,
reduced exit costs,
reduced loss of
legitimacy);
resource expansion
(from other
bankruptcies)
Triggering/outcome-
enhancing (no
distinction)
Shaping (more
growth-oriented)
Grégoire
&
Shepherd
(2012,
AMJ)
Deductive, hypothesis-testing based on cognitive
theory, addressing how combinations of supply-
and demand-related enablers influence formation
of “opportunity beliefs” with person-factors as
moderators. Experimental. Causes on aggregate
Technological and
demographic/
composite
change4
N/A (experimental
setting with
manipulation of the
agent’s perceptions).
Mechanisms of
individual enablers
not discussed
Triggering
(“opportunity”
perception/
evaluation)
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(the technology and the need) and micro level
(agent characteristics). Effects on individual level
(opportunity belief).
Hiatt et
al. (2009,
ASQ)
Deductive, hypothesis-testing within an
institutional theory framework addressing how
the temperance movement affected aggregate
rates of brewery failures and founding of soft
drink manufacturers. Multiple sources of archival
data. Causes and effects on aggregate (state)
level.
Socio-cultural
change
(temperance
movement) and
related
regulatory
change
Gradual onset with
increasing
predictability (public
movement gained
substantial
momentum) and
increasing spatial
(from local to country
wide) and socio-
demographic (ended
with a population-wide
alcohol ban) scope.
Legitimation* (incl.
via regulation);
codification;
demand
substitution
Triggering/outcome-
enhancing (no
distinction)
Shaping (beer � soft
drinks [possibly
selection])
Shane
(2000,
OS)
Theory-building within a multi-pronged
framework based on qualitative investigation of
the (then) full population of eight ventures
licensing a specific technology, addressing “who
will pursue what “opportunity”, and” how?”.
Technological
(3D printing)
Gradual and relatively
predictable onset (the
development took
place over a longer
period); high spatial
None – explanations
are agent-based
Triggering
(“discovery”)
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Interviews and archival data. Causes and effects
on micro level (individual � new venture idea),
given the technology.
temporal, and sectoral
scope (applicable in
various global
industries).
Shepherd
&
Williams
(2014,
JMS)
Theory-building within positive psychology
perspective on compassion organizing. Uses
archival data to examine how ventures emerge to
relieve suffering in disaster aftermath. Causes
and effects on aggregate level (local community).
Natural–
environmental
(disastrous
wildfire)
Onset of high suddenness
and low predictability
(natural disaster) with
highly limited
temporal and spatial
(specific local
community after one
wildfire) but broad
socio-demographic
(the entire population)
scope.
Demand expansion
(victim suffering);
resource expansion
(donations)
Triggering/shaping/
outcome-enhancing
(implied,
distinctions not
discussed)
Sine &
Lee
(2009,
ASQ)
Deductive, hypothesis-testing within a multi-
pronged framework addressing how the size of a
social movement directly and indirectly
influenced entrepreneurial activity in the wind
energy sector on the state level. Multiple sources
Socio-cultural
(environmental
movement) and
related
regulatory
Gradual onset (active
social movement,
ongoing lobbying);
broad temporal but
limited spatial (more
Legitimation*,
codification,
demand
substitution.
Triggering (empirics
cover entry into the
process, not
completion)
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of archival data. Causes and effects on aggregate
(state) level.
change active in specific
states) and sectoral
scope (focused on
renewable energy).
von Briel
et al.
(2018,
ETP)
Theoretical analysis generating technology- and
sector-level propositions about properties of
technologies and the mechanisms by which they
enable different stages of the new venture
creation process. Cross-level (technology
characteristics are related to their mechanisms;
mechanisms provided within and across ventures
affect venture and sector outcomes)
Technological
(different
digital
technologies)
Varying (based on the
specific technology).
Combination*,
compression*,
conservation*,
(resource)
expansion*,
generation*,
(resource)
substitution*
Triggering
(enablement of early
stage prospecting)
Shaping (product,
process, perhaps
venture)
Outcome-enhancing
(of exploiting stage)
1) AMJ = Academy of Management Journal; ASQ = Administrative Science Quarterly; ETP = Entrepreneurship Theory & Practice; JMS = Journal of
Management Studies; OS = Organization Science
2) Some identified characteristics appear too relational or too specific to a particular (type of) enabler to deserve inclusion in our framework;
3) Those marked with an asterisk (*) were used explicitly in the work in question. Codification as used in social movement studies within an Institutional
Theory framework can be seen as a subcategory of the broader legitimation mechanism, which is why we do not include it separately in Table 1.
4) The increased number of children diagnosed with ADHD can be regarded a demographic enabler arising from multi-pronged scientific progress enhancing
identification of these children as well as the understanding of their pedagogical needs.
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TABLES AND FIGURES
TABLE 1
Examples of Mechanisms of External Enablers in Venture Creation (Non-exhaustive)
Label Definition Example
Compression
Reduction in the amount of time required to
perform an activity
3D-printing, which considerably shortens
development times
Conservation
Reduction in the amount of resources
required to perform an activity
Changes to the natural environment that
reduce the need for cooling, heating,
irrigation
(Resource)
Expansion
Increase in the amount of a resource that is
accessible
Crowdfunding platforms that make
external finance and effective market
research available to more start-ups
(Resource)
Substitution
Replacement of one resource with another
Changing social mores and progress in
medical science that trigger shift to
using autistic software developers
(Austin et al., 2008)
Combination
Coupling with external resources or artifacts
to provide functionality
Leveraging technology platforms; a
natural disaster that triggers an inflow
of external resources (Shepherd &
Williams, 2014)
Generation
Allowing the creation of new artifacts
(devices, functionality, business models)
New technology that makes entirely new
functionality possible (Yoo et al. 2012)
Uncertainty
reduction
Reduction in the perceived uncertainty of
any business decisions of buyers or sellers
Bipartisan agreement that creates an
expectation of long-term stability
Legitimation Increase in the legality or psychological/ Formal legalization; socio-cultural or
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socio-cultural acceptability of the venture or
its offerings
demographic trends that change values
in favor of a product category (Hiatt et
al., 2009; Weber et al., 2008)
(Demand)
Expansion
Increase in demand at a given price and
given functionality
Macroeconomic income growth;
population growth
(Demand)
Substitution
Increase in demand that is due to making a
focal venture’s market offerings
[perceived as] more needed/attractive
(positive substitution) or to making
competitive offerings perceived as less
needed or attractive (negative substitution)
Terrorist attack, natural disaster or
demographic shift that fuels demand
for associated products; socio-cultural
trends and/or legislation that ban or
disadvantage competitors’ market
offerings
Enclosing
Increase in a venture’s ability to capture the
loyalty of buyers and the value it creates
IP legislation; technology that facilitates
customer “lock-in” (Amit & Zott,
2001); shortages and limited
competition due to outbreak of war
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FIGURE 1
External Enablers Framework (focused areas shaded in grey)
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FIGURE 2
Sectoral and Spatial Scope of External Enablers
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FIGURE 3
Varying Onset of External Enablers
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BIOGRAPHIES
Per Davidsson (per.davidsson@qut.edu.au) is Professor in Entrepreneurship at QUT Business
School (Australia) and the Jönköping International Business School (Sweden). He has served as
Chair of the AoM Entrepreneurship Division and as associate editor for leading entrepreneurship
journals. Per’s research focuses on new venture creation, small firm growth, and research
methods.
Jan Recker (jan.recker@wiso.uni-koeln.de) is Chaired Professor for Information Systems and
Systems Development at the Faculty of Management, Economics and Social Sciences,
University of Cologne, and Adjunct Professor at QUT Business School. He researches digital
entrepreneurship, sustainability of information systems and systems analysis and design.
Frederik von Briel (frederik.vonbriel@qut.edu.au) is a Senior Research Fellow in the School of
Management at QUT Business School. Most of his current research focuses on digital
entrepreneurship, digital innovation, and the ecosystems surrounding both phenomena.
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