Opportunity recognition has long been considered as a crucial aspect of the entrepreneurial process. (Ventakaraman, 1997; Gaglio, 1997; Hills, 1995). To understand the influential role of social networks in entrepreneurial opportunity recognition in emergent technologies first it is essential to review the essence of opportunity recognition in prior literature. To date much prior opportunity recognition research has in common that "innovation" and "information" are two important elements in this process.
Opportunity recognition involves having specific information regarding market, industry and technology conditions and other factors (Ozgen & Baron, 2007) and the discovery of an innovative idea to create new businesses (Schumpeter, 1934; Kirzner, 1973; Kirzner, 1997). Opportunity recognition is also defined as an act of innovation in new service, process and production (Schumpeter, 1934; 1943) that involves seizing new marketable ideas (Kuratko & Hodgetts ,1998).
To date researchers applied various approaches in opportunity recognition. Some focused on the role of active and systematic search for information in the identification of entrepreneurial ideas and innovations for new markets, products, services, methods or processes (Schumpeter, 1942). In other words, entrepreneurs recognize opportunities by scanning the environment for information and focusing on markets, industry, customers and technological developments (Bhave, 1994; Reitan, 1997; Busenitz & Barney, 1996).). Prior research found a strong link between the industry change, i.e. growth of sales, entry barriers and manufacturing possibilities, or market structure such as demographics and socio-cultural factors lead resigning of opportunities and creation of new ventures (Drucker, 1985; Dean & Meyer, 1992). Changing industry or market conditions may shift the demand and production possibilities and lead to entrepreneurial inventions (Timmons, 1999; Kuratko & Welsch, 2001; Dean & Meyer, 1992). Especially, scanning the environment focusing on technology, consumer economics, social values and governmental regulations play an important role in the recognition of opportunities (Stevensen & Gumpert, 1985). Therefore, it was suggested that systematic search based on specific information leads the discovery of entrepreneurial possibilities (Shaver & Scott, 1991; Kaish & Gilad, 1991; Herron & Sapienza, 1992; Fiet, et al., 2000, Fiet el al., 2002).
Some researchers suggested that possession of information or alertness is critical in identifying and exploiting market opportunities (Kirzner, 1973) and claimed that entrepreneurial opportunities exist because people possess different information (Hayek, 1945). Possession of different information leads individuals to discover entrepreneurial possibilities because any given individual cannot identify all opportunities (Kirzner, 1973). Therefore asymmetries of information (Shane & Venkataraman, 2000) lead entrepreneurial innovations.
A stream of research applying a cognitive approach focused on the way people think and process information (Baron & Markman, 1999) and examined entrepreneurs who evaluate and discover opportunities and explored the skills, cognitive processes (Baron, 1998). These researchers found that "alertness", in other words, the way entrepreneurs perceive information and process knowledge play a key role in opportunity recognition. Therefore, opportunity recognition is a cognitive process and in the mind of certain individuals and opportunities are identified by being "alert" to possibilities that the market presents (Woo et al., 1992; West & Myer, 1997; De Koning, 1999).
Opportunity recognition is also defined as a joint function of individual and the environment and entrepreneurs' interaction with the environment shapes the evolution of ideas (Vesper, 1990; De Koning, 1999; Shane & Ventakaraman, 2000). …