erc/metu
INTERNATIONAL CONFERENCE IN ECONOMICS  IV
September 13-16, 2000, Ankara

 

The Role of Practical Knowledge in Entrepreneurial Discovery Procedures

Fuat Ođuz (Zonguldak Karaelmas University)

Abstract

Entrepreneurship has been a lacuna in economic theory for a long time. Recent work in this area assumes that an intuitive process is at work behind the entrepreneurial discovery. No explanation on the nature of this process has been provided. In order to remedy this gap Popperian learning mechanisms are introduced. However, the Popperian framework, with its emphasis on experimenting, downplays the practical and inarticulate domain in entrepreneurial discovery.

In this work, we argue that entrepreneurship is a fundamentally practical activity. Entrepreneurs learn through practical skillful coping before forming theories and testing them. Thus, the paper addresses the issue that how entrepreneurs learn where to look for opportunities. Following the phenomenological tradition, we describe entrepreneurship as ‘skillful and concernful coping in the world’. Practical learning behind the entrepreneurial discovery is a spontaneous and evolutionary process. The entrepreneurial activity is an active interpretation of the situation. Entrepreneurs introduce new ways of doing things by changing the background and sharedpractices at some level. The new approach argues that competition is skillful coping in the world. It has important implications in terms of the applications of the theory of entrepreneurship. In this way, competition and entrepreneurship becomes indispensable aspects of market processes. We look into the case of advertising so as to show the implications of the new approach. In the mainstream economics, advertising is seen mostly as an information gathering and search process. The entrepreneurial role in advertising does not come to the forefront. Even the Austrian theory does not provide an explanation on how advertising is part of the entrepreneurial discovery procedure. In our view, advertising is a way to change shared practices, expectations and institutional interpretations. The implications and applications of the new approach is naturally not limited to advertising. It provides a further step toward a better understanding of the practices that underlie economic activity.

 

Economic Research Center
Middle East Technical University
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e-mail: metuerc@metu.edu.tr