Europe needs more intrapreneurship

Mart Kikas, Senior Innovation Coach and Managing Partner, Academy of Innovation Coaching, Estonia


This article was first published in 2020 in the Entrepreneurial Mindset Network eZINE Volume 4 no 1

Mart Kikas is a Senior Innovation Coach and Managing Partner at the Academy of Innovation Coaching.  He is also a lecturer at Porto Business School where he co-created the Executive Master of Business Innovation programme and the Estonian Business School where he created the Business Innovation MBA programme.


Mart recently joined the MINDSET LEAP (Leading Experts and Advisors Panel) which helps to steer the strategic direction of the Entrepreneurial Mindset Network.  


He says that “the entrepreneurial mindset  is not just beneficial, it is a "must-have" attitude that every active citizen of the modern society should possess and demonstrate."


In this article Mart argues that Europe needs more intrapreneurship, rather than more entrepreneurship.   


He makes the case that the success of European companies depends on their competitiveness coming from innovation which is strongly rooted in the intrapreneurial behaviours of their employees. 


Image Credit: Urmas Kamdron


Entrepreneurship has been widely recognised by researchers as the source of a country’s competitiveness. But while the European Union (EU) countries have consistently high competitiveness rankings in the Global Competitiveness Reports, it is argued that Europe lags the world in entrepreneurship, which creates a paradox.


This paradox disappears when one takes a more detailed look at the phenomenon of entrepreneurship. Research shows that not all types of entrepreneurship lead to competitiveness of a country in the context of the EU. Only one type of entrepreneurship – intrapreneurship i.e. entrepreneurial behaviour of individual employees in established companies – drives competitiveness in the EU, both at the country level and the level of individual companies. This makes the EU a special case in the world, as in the EU competitiveness is based on intrapreneurship, rather than independent entrepreneurship by entrepreneurs establishing and managing their own companies.


In the EU, intrapreneurship drives competitiveness through the mediating function of innovation, as intrapreneurship is conceptualised as employee-driven innovation.


But currently the level of intrapreneurship in the EU countries is low, on average less than 5% of employees are behaving entrepreneurially at their workplaces (data from the Global Entrepreneurship Monitor reports). As the EU economy becomes more innovation-driven, such low share of employees engaging in intrapreneurship is creating a challenge for the EU companies regarding their competitiveness. This challenge is especially big for SMEs, the backbone of the EU economy.


This leads to an important realisation: to remain able to provide high and rising living standards and gainful employment for its citizens, the EU needs to increase its regional competitiveness, and to achieve this the EU needs more intrapreneurship, especially in SMEs.

 

Along similar lines, the World Economic Forum’s report “Europe’s Hidden Entrepreneurs: Entrepreneurial Employee Activity and Competitiveness in Europe” proposes that European leaders invest time, energy and capital in intrapreneurship, and develop competitive advantages that will play to Europe’s strengths, rather than to try and emulate other regions that are driven by spin-offs and independent entrepreneurship, like Silicon Valley in the U.S.


Thus, the EU needs more intrapreneurship to stay competitive and increase its regional competitiveness in today’s globalising world. The same is true for European companies, as their success also depends on their competitiveness coming from innovation rooted in intrapreneurship. Innovation happens when employees behave entrepreneurially at work, i.e. they engage in intrapreneurship and are intrapreneurs. ◼️