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Nassif
• Market evolution: The emergence of a new market or a change in the existing market structure can create an opportunity for new business. Market liberalization is a key example. • Capacity to produce in excess of domestic demand: A firm oriented toward a domestic market learns how to export its excess production. • Research: A technology-oriented firm or person can commercialize a patented invention as a result of research. • News: A discovery is driven by new information about business opportunities. • Random walk: High-risk entrepreneurs can create businesses through trial and error or by seizing a one-time opportunity. In many cases, more than one trigger was at play. The most decisive trigger was the combination of information about new business opportunities with an entrepreneur willing to take high risks and adopt new technologies and management techniques (box 3.1). Information normally came from business travels, previous study, or work experiences abroad. In a few cases, the process of obtaining information and translating it into business-relevant activities was supported by private sector networks. The similarity of the background, experiences, and attitudes of the entrepreneurs was striking, especially in contrast to the most predominant type of firm owners and managers within their societies, who usually lead a family business and were conservative and rent seeking. In contrast to characteristics associated with individual entrepreneurs, the case studies did not establish a clear pattern of firm type or size. Discoveries occurred in small and large firms, and they occurred in firms that sold products domestically first and, through various iterations of production changes, learned to export. Sometimes newly discovered products were added to an existing export portfolio; often firms were built up from scratch with the onset of the discovery. Most of the firms had one thing in common, however: they were all domestic, in the sense that they were rarely a result of foreign direct investment (FDI). This makes sense, considering that foreign investors base their investment decision on existing comparative advantages for exports and factors that include, among others, a certain skill level, infrastructure, or local production experience. Investments are less risky in industries in which countries have already proven export or production capacity. Moreover, research and development activities that potentially could lead to the discovery of new products typically do not take place in subsidiaries or production facilities of multinational companies.