Seeking Investment Opportunities in New Markets Created by Technical Change

Our interest in writing this article is to create a bridge between the scholarly and academic research on technological innovation and a private sector, for-profit business model that implements the ideas on innovation and entrepreneurship, primarily in metro regional economies.We begin by noting that most current speculation about technical change and investment opportunities glosses over the concept of how technical change in products affects markets. There has been some research and theorizing about the difference between quot;sustainingquot; technological innovation, and quot;radicalquot; innovation without the benefit of supporting empirical data that can explain or predict the difference between consumer behavior when confronted by the two forms of innovation.In other words, most economic theory just assumes from the beginning that innovation opportunities exist, and that the actors in the market, named capital and labor, will discover the opportunities that exist, and then exploit them.We explain how a more robust theory of innovation would start at the top of the innovation pipeline by examining the range of investment opportunities in a regional metro market and connect those observations to what consumers do when they first see a radical innovation for the first time.We conclude that entrepreneurs have a mental map, consumers have a mental map, and investors have a mental map of innovation.The idiosyncratic behavior of entrepreneuers is too difficult to predict, but innovation investment opportunities, especially the most radical types, can be anticipated by watching what consumers do when they first see a technologically new product. This observation occurs before there is a very big market of consumers, so the events will be hard to identify. The best place to watch for them is when technology is crossed between two products whose relationships at first seem to be obscure