Entrepreneurial social cognition and new venture creation: sociological perspective

Abstract

Entrepreneurs are under immense pressure to gain a competitive advantage in the global markets, but limited resources and opportunities are making it increasingly difficult. Despite this, there are still sociological and other factors that contribute to risk aversion among entrepreneurs. The study aims to present a global perspective on entrepreneurial social cognition and new venture creation. The study is based on a systematic literature review that identified various obstacles to entrepreneurial success. The study argues that successful entrepreneurship and business innovation are related to social cognition, risk perception, and agency. The results prove that the three mentioned variables are key in the establishment of new entrepreneurial ventures. Furthermore, literature analysis revealed that to foster a thriving knowledge-based economy, it is necessary to create a supportive social environment that encourages entrepreneurial endeavours. It emerged from the analysis of the literature that a rich social context, coupled with social cognition, significantly impacts the perception of entrepreneurial opportunities. The study emphasizes that external social factors such as political, socio-economic, and communal environments play a crucial role in shaping entrepreneurs’ perceptions of new venture creation. The quality of knowledge ingrained in the social context helps to mitigate the perceived risks associated with starting a new venture. Moreover, the study highlights the importance of agency in reducing risk perception and promoting new venture creation. By analysing relevant literature, the article provides a theoretical framework that contextualizes the creation of new ventures in modern knowledge-based economies. The study proposes effective mitigation of the negative schema abstracted from the social-ecological context through knowledge derived from social communities of practice.