Chapter 5 Cognitive Processes of Entrepreneurial Opportunity Identification: Toward A Holistic Understanding of the Micro-Mechanisms

Abstract Entrepreneurial opportunity (EO) identification pertains to the core processes of entrepreneurship and innovation. The initial phase of this process starts with individual cognition, which is why cognition has been established as a critical theoretical perspective. Knowledge and new information have been confirmed as essential cognitive impact factors. However, it is not understood well, how individuals apply those factors and how they actually identify innovative and economically viable EOs. To address the limitations of current research, this chapter investigates the current literature on underlying cognitive processes of opportunity identification. The literature analysis demonstrates that there is not a single cognitive process but rather a magnitude of different micro-mechanisms that are necessary for the successful identification of EOs. The findings are grouped to four categories of cognitive processes and entail their micro-mechanisms: pattern recognition, information processing, and creative thinking. Furthermore, the analysis reveals that those micro-mechanisms have seldom been related to each other within the scope of opportunity identification. This chapter closes this gap by discussing and contrasting and the different process categories and respective micro-mechanisms and suggests an integrative theory development and avenues for future research.