Organizations and Markets

Westgren at Missouri

30 May 2008 at 2:29 pm Peter G. Klein 2 comments

| Peter Klein |

Those of you within driving distance of Columbia, Missouri should come over Monday (2 June) for a seminar by Randy Westgren, “The Entrepreneurial Niche,” at 2:00 2:30pm in 217 Mumford Hall. Abstract below the fold. The talk is sponsored by the McQuinn Center for Entrepreneurial Leadership. Email me for details.

The Entrepreneurial Niche

Randall Westgren

There is plenty of advice for incipient entrepreneurs to search for their “niche”, particularly when the word is attached to “marketing”. There is some merit to this approach from a pragmatic perspective, but is there a framework for the study of entrepreneurship in the social sciences that goes beyond anecdotes or “just-so” stories?

I begin with the concept of the environmental niche as it has been used in ecology for nearly a century, with particular attention to the modern conception of the term that can be quantified as something more than the “address” in the landscape waiting for a tenant. This modern concept bears resemblance to Shane’s “individual-opportunity nexus” as a definition of entrepreneurship and can be the basis for theoretical and empirical analyses of the landscape for entrepreneurial search and exploitation.

I describe some agent-based models of entrepreneurial behavior on a patchy landscape (nonpatterned niches with variable economic value). The agents have different profiles of alertness, judgment, aspirations, and exploitive efficiency. That is, the attributes are based on economic models of Kirzner, Simon, and others. Agents also have the capacity to learn and to join networks with upstream or downstream firms as part of niche-seeking. The simulation results highlight the implicit tradeoffs among these attributes when movement to a new niche is neither costless nor risk-free.

How can the environmental niche concept be exploited in empirical analyses, rather than in simulations of artificial markets? We return to the ecology literature to examine the prospects for using ordination techniques such as canonical correspondence analysis in studies of the environment for entrepreneurship, especially in industry clusters.

Entry filed under: - Klein -, Entrepreneurship, Food and Agriculture, Former Guest Bloggers.