Opportunity recognition is of central importance in the field of entrepreneurship. Entrepreneurs bump into countless decision-making situations, be it in the process of creating new ventures or day-to-day business situations in existing business. Although there have been research attempts to understand how entrepreneurs recognize opportunities amidst such myriad choices, there is no single answer yet. This study considers the influence of entrepreneur’s social capital and his perception of risk in the opportunity recognition process. We find very little literature that propose research results on the influence of social capital in opportunity recognition process. In this paper, the researchers have taken efforts to analyze all the sub-processes of opportunity recognition. The research was conducted with 117 entrepreneurs of micro, small and medium enterprises from Information Technology and Information Technology Enabled Services (IT and ITES) Industry. The questionnaire used was adopted from a well-researched inventory but modified to suit Indian environment and the objectives of the study. PLS method was employed to analyze the data and interpret the results. The research revealed that cognitive dimension of social capital is the most important factor that influences the risk perception of an entrepreneur. The study also brings out the significant impacts of structural dimension of social capital on competitive scanning, relational dimension of social capital on proactive searching, and cognitive dimension of social capital on knowledge acquisition and proactive searching.

Entrepreneurship and enterprise creation have contributed significantly to the economic and social development of any nation. It is a glaring truth that the economic progress of a nation has been significantly advanced by entrepreneurs, who are not only innovative, but are able to identify and exploit opportunities. Entrepreneurs have exhibited their willingness to take risks and also they possess the capacity to transform ideas into opportunities. It has been enigmatic for the researchers and others to understand this ability of entrepreneurs to identify opportunities amidst countless choices.

Opportunity Recognition, evaluation and exploitation form the crux of entrepreneurship (Bygrave, 1993; Shane and Venkataraman, 2000; and Baron, 2007). Smith et al. (2009) have also recognized the importance of opportunity recognition in the success of entrepreneurial pursuits. In the words of Stewart et al. (1998), entrepreneurship “sparked by the recognition of an opportunity, the entrepreneur, through an act of volition or intention”, is the catalyst of the process of entrepreneurship'.

While the impact of entrepreneurship on economic development is evident, the knowledge of factors that persuade opportunity recognition remains woolly. This ambiguity has encouraged the journal arena to focus on the importance of past experience and prior knowledge, personality traits and social networks as potential antecedents of entrepreneurial opportunity recognition (Shane, 2000; and Ardichivili et al., 2003). But there are a lot of unaddressed issues in each of these topics.

Initially research concentrated on individual characteristics that drive opportunity recognition like the need for achievement (McClelland, 1961), locus of control (Rotter, 1966), an extraordinary ability to innovate and transform markets (Schumpeter, 1934). Later, Gartner (1985) suggested a more holistic study of the process of entrepreneurship by explaining the interaction amid the entrepreneur, the organization and the environment in the context of new venture creation and opportunity recognition. Further studies, including Shaver and Scott (1991), proposed an investigation into the cognitive process of entrepreneurs. The cognitive psychology of entrepreneurship has also explored entrepreneurs’ perception of risk. Risk perception is one important factor that differentiates an entrepreneur from others. Palich and Bagby (1995) defend that entrepreneurs do not differ in their risktaking propensity, but they differ in their perception towards risk. Mullins and Forlani (2000) have also studied the elements of perceived risk in opportunity recognition process of entrepreneurs.

Entrepreneurship Development Journal, Microenterprises in India, Micro, Financial Services, Small and Medium Enterprise, Indian Economy, Microentrepreneurial Ventures, Social Development, Women Entrepreneurs, Sociocultural Traits, Indian Culture, Performance Measurement, Organizational Traits.