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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

https://eprints.qut.edu.au/view/person/Davidsson,_Per.html

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https://eprints.qut.edu.au/119185/

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

1

External Enablement of New Venture Creation: A Framework

Per Davidsson

Queensland University of Technology and Jönköping International Business School

[email protected]

Jan Recker

University of Cologne and Queensland University of Technology

[email protected]

Frederik von Briel

Queensland University of Technology

[email protected]

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.

Page 1 of 59 Academy of Management Perspectives

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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.

============================


============================

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.

============================


============================

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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35

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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36

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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37

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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38

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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39

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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51

(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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52

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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53

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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54

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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55

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 ([email protected]) 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 ([email protected]) 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 ([email protected]) 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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