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Purpose Opportunity recognition is an important aspect on entrepreneurship, especially for technology‐based ventures. Drawing on Austrian economic theory, recent studies have emphasized the importance of market knowledge in opportunity recognition. Although insightful, these studies do not take account of relationships that exist between different types of knowledge (e.g. technology and market knowledge). The authors aim to address this gap by integrating the Schumpeterian theory of opportunity development with Kirzner's theory of opportunity discovery to examine these relationships. Design/methodology/approach The data consist of a longitudinal sample of 42 new biotechnology ventures from the USA, Finland, and Sweden. Findings The paper finds that both market knowledge and technological knowledge (measured as the number of patents) contribute to firms' subsequent recognition of entrepreneurial opportunities. Originality/value The results show the value and importance of early market knowledge and technological knowledge for subsequent opportunity recognition. The empirical findings are reflected in the light of current research on Kirznerian and Schumpeterian opportunity recognition.
Siegel et al. (Sun,) studied this question.