For Kirzner, entrepreneurship is not just another factor of production. Rather, it is “costless.” It does not involve the resource expenditures necessary to obtain the services of land, labor, or capital. One does not deliberately set out to become an entrepreneur; nor does one exert oneself to achieve entrepreneurial alertness. One cannot teach oneself to notice economic opportunities in the face of uncertainty. The noticing is primary and happens before any entrepreneurial action is possible. In the real world, the noticing is antecedent to all action, since all real human action occurs in the face of uncertainty and thus has an entrepreneurial component to it. One cannot be taught entrepreneurial awareness in the same manner that one can be taught management techniques or factual knowledge or skill in a given line of work. Every entrepreneur does use all of the above, along with taking calculated risks and purchasing land, labor, and capital for his activities. However, those functions are not in themselves entrepreneurship. Entrepreneurship is the alertness to and foresight of market conditions; it must necessarily precede actions taken in accordance with that alertness.

          A possible challenge to Kirzner’s theory of entrepreneurship might cite the case of the popular novelist who enjoys a stream of income from his book. Was his activity entrepreneurial, having foreseen a widespread demand in the market for his work? Such a prediction necessarily involved uncertainty, since the book had not existed before, and there was no way to anticipate demand for it with perfect confidence. Or was his activity an exertion of his skill and labor in writing the book? That is, did the novelist write the book because he foresaw market demand for it, or did the market demand occur as a resultant side effect of the novelist’s writing the book?

          Hypothetically, Kirzner’s answer to such a critique would have distinguished the author’s function as an entrepreneur from his function as a laborer. The author acted as an entrepreneur to the extent that he accurately foresaw the market’s demand for his product and acted on this prediction. To the extent that he created the literature as a means to his artistic expression and the conveyance of his intellectual values and observations – irrespective of popular economic demand – he acted as a laborer toward his own consumption. Even the actualization of his desire to sell the book, however, required him to function in the capacity of a laborer in actually writing it. The actual writing of the book was not inherently entrepreneurial, though entrepreneurial alertness may have led up to it and even justified it.

          To challenge the Kirznerian theory of entrepreneurship, “mainstream” economists also refer to individuals’ intentional undertaking of market research. Market research gives the entrepreneur more accurate information on the basis of which he might decide what economic opportunities exist and how to benefit from them. However, market research is a systematic endeavor, requiring expenditure of time and resources – hence not being “costless” as Kirzner claims entrepreneurship to be.

          A defender of Kirzner’s theory would state in response that the undertaking of market research is not in itself entrepreneurship. Rather, the exercise of entrepreneurial awareness occurs even before the research happens. Entrepreneurship here would consist of recognizing that the market research is a useful endeavor to undertake in the first place. Once this decision is made, the resource expenditures toward actually conducting the market research are not strictly entrepreneurial.

          Kirzner’s theory underscores the importance of entrepreneurship to a successful market economy. Entrepreneurship cannot be taught; it cannot be planned or centrally managed. However, it is indispensable to addressing the uncertainty inherent to all human action and to allowing any mistakes made in the face of this uncertainty to be corrected. The entrepreneur’s selfish motivation for profit presents him with a reliable incentive to remedy sheer ignorance and error in the marketplace – thereby improving life for all.