“Entrepreneurs and the Emergence of New Industry Structures“
Studies in Emergent Order, Vol. 4 (2011)
This paper is an examination of the role that individual entrepreneurs play in the creation of structure in the emergence of new industries. Bridging between institutional theory, complexity theory, and the strategic management literature, we develop a conceptual model that describes how individual entrepreneurs pursuing opportunity in a new industry form a basis for the emergence of order and initial structure in that industry. We thereby illustrate how the development of industry structure in the early fluid stages is influenced by both individual and institutional effects. Our conceptual model explains the self-organization of a new industry through five distinct coordination processes in which entrepreneurs behave as agents within a complex environment. We show how learning and profit-seeking behaviors of entrepreneurs create an asymmetric transition mechanism that locks in emergent order and results in increasingly complex structure.