Why Is Corporate Entrepreneurship Important? (2023)

Corporate entrepreneurship is key to the fight against climate change, says Bocconi University professor Markus Venzin

The idea of what a large corporation is, and should be, is changing. To remain competitive, even established organizations need to become more entrepreneurial and grow innovative new businesses.

What’s known as corporate entrepreneurship brings together the financial resources and structure of a large corporation with the entrepreneurial energy of startups.

What is corporate entrepreneurship?

Corporate Entrepreneurship, or Intrapreneurship, is the creation of new businesses, products, or services from inside an organization to generate new revenue growth through entrepreneurial action.

Corporate Entrepreneurship works in two ways. An established corporation either develops an idea internally, builds the startup, casts it off externally, and then brings the startup back into the wider organization at a later stage.

Or the company identifies an early-stage startup to collaborate with or acquire, and then assimilates the business into the wider organization.

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Why is corporate entrepreneurship important?

In a rapidly changing business environment, innovating and responding to change via corporate entrepreneurship is key. Corporate entrepreneurship can also lead to more productivity and boost morale among a workforce who are given the space and opportunity to tackle new challenges and implement new ideas.

Yet there are even greater benefits to corporate entrepreneurship, according to Markus Venzin, professor of global strategy and dean of innovation at Bocconi University.

Just 100 corporations are the source of 70% of global carbon dioxide emissions. Corporate entrepreneurship is important, Markus says, because it can help form the bedrock for action needed to combat climate change.

“If we want to create a more sustainable world, we need to concentrate on corporations becoming more sustainable,” he says.

On October 28, Markus is hosting a free online Masterclass in Management where he’ll discuss how new technologies—data science, artificial intelligence, and the Internet of Things (IoT)—can be used to make companies more sustainable.

(Video) Corporate Entrepreneurship

Whether that’s established banks working with or launching their own fintech startups; traditional farmers incorporating the latest innovations in artificial intelligence or biotech to make their operations more sustainable; or energy giants working with dynamic, agile clean energy startups to reimagine the energy sector, the potential of corporate entrepreneurship is huge.

And Markus believes that companies no longer have a choice of whether to adopt it or not.

“It needs to be possible,” he asserts. “You need to go beyond your core product, you need to take up broader challenges, start working with startups, and that requires much more than just doing your job as manager.

“It requires taking risks, entrepreneurial risks as individuals, and that's going to be a key aspect of making the world more sustainable.”

Why Is Corporate Entrepreneurship Important? (1)

Implementing corporate entrepreneurship

To successfully implement corporate entrepreneurship, firms must have the right culture in place to encourage and enable innovation.

Managers must select employees with entrepreneurial drive and be open to creating a culture that supports the inception and implementation of innovative ideas. Companies must also invest in the capabilities needed to segment the market, forecast trends, and understand customer needs.

Internally, companies also need to reduce what Markus refers to as ‘firm-related uncertainty’. In other words, they should work to clarify how good ideas are supported by the firm.

Markus explains that this is done by reducing:

→Communicative uncertainty: Managers need to make sure their ideas are recognized as opportunities. They need to package their ideas and convince others.

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→Behavioral uncertainty: Resources need to be allocated to good ideas. Behavioral uncertainty arises when the actions of managers involved in that process do not fully reveal their true intent.

→Value uncertainty: How are the benefits of entrepreneurial ideas shared? Issue of value appropriation, international commercialization, transfer pricing, and the application of incentive schemes are important on the individual and unit-level. Entrepreneurs need to know what rewards they can expect if they engage in innovation processes.

Corporate entrepreneurship examples

Markus is also managing partner of venture builder, Corporate Hanger, an organization created by Italian electrical cable company Prysmian Group to identify and develop innovative ideas from inside or outside of the company.

Most of the startups are then managed by Corporate Hanger for up to five years before they are introduced into clients’ operations. Examples include Kablee, an e-commerce platform for cables, and Cultifutura, a vertical farming solutions startup.

Italian energy company, Enel, is another firm that actively practices corporate entrepreneurship. The Enel Innovation World Cup is an internal competition launched by the company’s Innovation & Sustainability department, which promotes risk acceptance and gives global Enel staff the opportunity to develop businesses related to the energy sector.

Employees get to manage the entire productive process alone or with a team. They develop ideas, test them, and then source client feedback so the product arrives to market in line with customers’ expectations.

Students on Markus’s corporate entrepreneurship course at Bocconi University learn through his personal experiences, as well as his network in the form of guest speakers.

They hear from the likes of Emanuela Trentin, the director of renewables company Siram Veolia, as well as the Srini Sirapurapu, head of worldwide R&D at Prysmian, Fabio Romeo, former head of strategy at Prysmian, and Marco Di Dio, CEO of Jakala, a data science consulting firm.

The course also builds up students’ understanding of how to successfully incorporate a culture of corporate entrepreneurship into a company, and the importance of large organizations using their resources to incubate and grow the best ideas.

“Corporate entrepreneurship has a lot of potential to make the world more sustainable because when you have a startup that makes things more sustainable, through collaboration with a larger company the startup can grow much quicker, and can penetrate many countries at the same time,” Markus says.

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Whether it’s by using the skills you can acquire at Bocconi University to build a startup internally at a company, or to lead the sourcing and acquisition of innovative early-stage ventures to work with, more talent is needed to meet the demands for corporate entrepreneurship. And, as Markus points out, companies don’t have a choice.

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FAQs

Why is corporate entrepreneurship important? ›

Increased productivity and employee morale: Corporate entrepreneurship programs enable employees to work on ideas that they find exciting and challenging. Increased employee engagement and motivation ultimately leads to increased productivity.

What are 3 reasons why entrepreneurship is so important? ›

Entrepreneurship creates jobs – new and young businesses, not small businesses, are the engine of net job creation in the economy.
  • Entrepreneurship Improves Productivity. ...
  • Entrepreneurship Drives Innovation. ...
  • Entrepreneurship Creates Jobs. ...
  • Read More.

What is corporate entrepreneurship in your own words? ›

Corporate entrepreneurship (CE) is a term used to describe entrepreneurial behavior inside established mid-sized and large organizations. Other popular or related terms include organizational entrepreneurship, intrapreneurship, corporate venturing, and strategic entrepreneurship.

What are the important forms of corporate entrepreneurship? ›

Opportunist, enabler, advocate and producer are the four models of corporate entrepreneurship that Robert C. Wolcott and Michael J.

What is corporate entrepreneurship example? ›

Some good corporate entrepreneurship examples are leaders are, in technology, such as Steve Jobs of Apple; in finance, Michael Spencer of ICAP; in marketing Sir Martin Sorrel of WWP. The companies that employ these corporate entrepreneurs typically have something to gain from them as well.

What is the impact of corporate entrepreneurship in the society? ›

Corporate entrepreneurship creates opportunities in employment, technological advances, value creation, and cultural transformation for entrepreneurial ecosystems, entrepreneurs, governments, economies, and society around the globe.

What is the most important thing about entrepreneurship? ›

Key Takeaways

A great entrepreneur must be able to effectively communicate, sell, focus, learn, and strategize. An ability to continuously learn is not just a key entrepreneurial skill, but also a very valuable life skill. Growing a business requires a sound strategy based on inherent business sense and skills.

What is the most important factor in entrepreneurship? ›

According to entrepreneurs, three factors are most important for enabling a company's growth: access to markets, the supply of human capital (i.e. people with the right skills for the job) and access to funding.

What are five advantages of entrepreneurship? ›

One of the biggest benefits of being an entrepreneur is you get to wear various hats and get to learn many things. These learnings are not just limited to your own industry but about marketing, managing money, handling people, dealing with risks, getting the work done in the most effective way, etc.

What is the value of corporate entrepreneurship? ›

In a rapidly changing business environment, innovating and responding to change via corporate entrepreneurship is key. Corporate entrepreneurship can also lead to more productivity and boost morale among a workforce who are given the space and opportunity to tackle new challenges and implement new ideas.

What is effective corporate entrepreneurship? ›

Successful corporate entrepreneurship results in a consistently innovative stream of new ideas, which deliver new products and services, and in turn leads to boosts in both revenue and organisational growth.

What are the characteristics of corporate entrepreneurship? ›

The 4 traits needed for successful corporate entrepreneurship
  • Decentralisation: Companies that wish their employees to be entrepreneurial must have flat management structures. ...
  • Risk taking: Corporate entrepreneurs can only operate in a company that is open to a certain level of risk taking.
Nov 17, 2017

How do you promote corporate entrepreneurship? ›

10 ways an organization can encourage entrepreneurship
  1. Develop a statement to encourage entrepreneurship. ...
  2. Create a bond between employees and the company. ...
  3. Celebrate mistakes. ...
  4. Promote 'intrapreneurship' ...
  5. Pursue passions in and out of the company. ...
  6. Entrepreneurship is a mindset. ...
  7. Recognize and reward. ...
  8. Build personal brands.
Jun 8, 2021

What is corporate entrepreneurship essay? ›

Based on the above information, we can determine that corporate entrepreneurship is an ongoing process within an existing firm that leads to the creation of new ventures, products, and processes. Additionally, corporate entrepreneurship renews business strategies and brings a competitive edge to the firm.

What are the advantages and disadvantages of corporate entrepreneurship? ›

Advantages of a corporation include personal liability protection, business security and continuity, and easier access to capital. Disadvantages of a corporation include it being time-consuming and subject to double taxation, as well as having rigid formalities and protocols to follow.

How does a corporate impact the economy? ›

Large businesses are important to the overall economy because they tend to have more financial resources than small firms to conduct research and develop new goods. And they generally offer more varied job opportunities and greater job stability, higher wages, and better health and retirement benefits.

Why is entrepreneurship successful? ›

Entrepreneurs know their product inside and out. They also know the market. Most become successful because they create something that didn't already exist, or they significantly improve an existing product after experiencing frustration with the way it worked.

What is the main and most important characteristics of entrepreneurship? ›

Characteristics and behaviors like experimentation, persistence, and innovation can be developed with time, experience, and training. As long as you possess the entrepreneurial spirit, you'll be able to seize opportunities and overcome challenges throughout your journey.

What are the 4 important factors of entrepreneurship? ›

Entrepreneurship: 5 Critical Success Factors
  • Sacrifice – Are you willing to sacrifice short term to benefit in the long term? ...
  • Experience – Do you have some business or related experience? ...
  • Leadership – Do you like being the leader? ...
  • Organization – Are you organized? ...
  • Optimism – Are you optimistic?

Which is one of the greatest benefits of entrepreneurship? ›

When you run your own business, you build your own team. You can surround yourself with people who share your vision and work the way you want them to. Being able to nurture new talent and get the best out of your colleagues is one of the most rewarding things about being an entrepreneur.

What are 3 things entrepreneurs need? ›

3 Traits Every Successful Entrepreneur Must Have, According to the Experts
  • Successful Entrepreneurs are Resilient. ...
  • Successful Entrepreneurs are Confident. ...
  • Successful Entrepreneurs are Innovative.

What are 3 key successful factors to be an entrepreneur? ›

Responsibility, mindset and passion are the three secrets to entrepreneurial success. Embrace them and you will find the success you're looking for.

What are the 3 main types of entrepreneurship? ›

Traditionally, entrepreneurship is categorized into four main types: small businesses, scalable startups, large companies and social entrepreneurs.

What are the 3 C's key factors to successful entrepreneurship? ›

I previously highlighted curiosity, creativity and commitment as individual characteristics, each with its own power to fuel the entrepreneurial mind. Instead, it may be the interaction between these characteristics that captures true entrepreneurial success.

What makes entrepreneur successful? ›

Passion, resourcefulness, willingness to improvise and listen to others and strong determination to succeed is what makes an entrepreneur successful. And this is what you have to keep in mind as well if you want to be a successful entrepreneur yourself.

What does an entrepreneur need to be successful? ›

5 Skills Every Entrepreneur Needs to Succeed
  • Finance Skills. Budgeting and knowing how to keep track of finances is essential for entrepreneurs. ...
  • Communication skills. Being a strong communicator is very important for entrepreneurs. ...
  • Leadership Skills. ...
  • Time Management. ...
  • Sales.
Aug 30, 2022

What are the two most important quality to become a successful entrepreneur? ›

Work ethic and passion go hand in hand. It takes work ethic to keep the business strong, and it takes passion to feel motivated enough to maintain a good worth ethic. I believe passion is easily the most significant personality trait any successful entrepreneur has, and for obvious reasons.

What are the 4 successful Strategies for entrepreneurial success? ›

6 Timeless Strategies That Drive Successful Entrepreneurship
  • Study the competition. ...
  • Conserve cash no matter how good business is. ...
  • Research new products and services. ...
  • Don't tackle huge markets at first. ...
  • Listen to customer feedback and adapt. ...
  • Respond to change. ...
  • 55 Small Business Ideas To Start Right Now.
Jan 11, 2017

How does entrepreneurship works? ›

Entrepreneurial activity includes developing and starting a new business and implementing a business marketing plan, often with the end goal of selling the company to turn a profit. An entrepreneur who regularly launches new businesses, sells them and then starts new companies is a serial entrepreneur.

What are 5 examples of entrepreneurship? ›

Here are five types of entrepreneurs with real-world examples to help you get an idea of which route you should pursue.
  • Social entrepreneurship. ...
  • Innovation entrepreneurship. ...
  • Big business entrepreneurship. ...
  • Small business entrepreneurship. ...
  • Scalable start-up business entrepreneurship.
May 18, 2022

How do you demonstrate entrepreneurship in the workplace? ›

Here are eight guiding principles that have served me well while helping to foster an entrepreneurial mindset and culture within the workplace:
  1. Hire the right people. ...
  2. Empower them. ...
  3. Listen to them. ...
  4. Reward them. ...
  5. Coach them. ...
  6. Keep them accountable. ...
  7. Get the job done first. ...
  8. Give them guardrails.
May 17, 2021

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