Description
During this brief information in regard to intrapreneursh ip an internat iona l study.
Niels Bosma
Erik Stam
Sander Wennekers
Zoetermeer, January 2010
Intrapreneurship - An international study
2
EIM Research Reports
reference number H201005
publication January 2010
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3
Intrapreneurship - An international study
Niels Bosma
a, b
, Erik Stam
a, c, d, e
and Sander Wennekers
f
a
Utrecht University
b
Global Entrepreneurship Research Association
c
WRR (Scientific Council for Government Policy)
d
University of Cambridge
e
Max Planck Institute of Economics
f
EIM Business and Policy Research
Abstract
This paper presents the first results of a novel international comparative study of
intrapreneurship, i.e., employees developing new business activities for their
employer. This study is based on an exploratory investigation in the framework
of the Global Entrepreneurship Monitor 2008, in which eleven countries
participated. First, it was found that, on average, less than 5 percent of
employees are intrapreneurs, and that in most countries its incidence in the adult
population is significantly lower than that of early-stage entrepreneurial activity.
In addition, the prevalence of intrapreneurship is about twice as high in high
income countries as in low income countries, which is probably caused by a
combination of a relatively high share of adults employed in multiperson
organizations in high income countries and higher levels of autonomy of
employees in these countries. Second, the relationship between intrapreneurship
and independent entrepreneurship is analysed at the micro (individual) level as
well as at the national level. We find that at the individual level, intrapreneurs
are much more likely to have intentions to start a new independent business than
other employees. However, there is a negative correlation between
intrapreneurship and early-stage entrepreneurial activity at the macro level. One
explanation for these contrasting outcomes is the diverging effect of per capita
income on intrapreneurship (positive effect) and early-stage entrepreneurial
activity (negative effect).
Keywords: intrapreneurship, entrepreneurial employee behavior, entrepreneurship, economic
development
Contact: Niels Bosma, mailto:[email protected].
Version: 12 January 2010, EIM Research Report Intrapreneurship_v9.doc.
Acknowledgement:
This paper is part of the Research Program SCALES carried out by EIM and financed by the
Dutch Ministry of Economic Affairs. It is based on an exploratory investigation in the
framework of the Global Entrepreneurship Monitor 2008. An early version has been read at a
research seminar at Utrecht University on 23 October 2009. The authors thank GEM
researchers and their sponsors (www.gemconsortium.org) for making this research possible.
Nations participating in this 2008 special GEM survey were Brazil, Chile, Ecuador, Iran,
Republic of Korea, Latvia, the Netherlands, Norway, Peru, Spain, and Uruguay.
4
Summary
In the past decades both the entrepreneurship and the management literature have
paid increasing attention to entrepreneurship within existing organizations (Kao,
1991; Lumpkin and Dess, 1996; Shane, 2003). This phenomenon is usually
called 'corporate entrepreneurship', 'corporate venturing' or 'intrapreneurship'.
Entrepreneurship in existing organizations can be studied at the individual, the
organizational and the macro level. So far most attempts to study entrepreneurial
efforts within organizations have ignored the potentially important effects of the
broader macro context on intrapreneurship. Consequently research into the
relationship between intrapreneurship and independent entrepreneurship at the
macro level is also lacking.
This paper presents the first results of a novel international comparative study of
intrapreneurship at the individual level across eleven countries. The paper makes
two contributions to the literature. First, it provides international comparative
research on intrapreneurship in low and high income countries. This makes it
possible to trace the effect of the macro context (i.e. levels of economic
development) on the prevalence and nature of intrapreneurship. Second, the
paper delivers insight into the relationship between independent entrepreneurship
and intrapreneurship at the national level (i.e., are they substitutes or
complements?) as well as the individual level (i.e., are intrapreneurs more likely
to have intentions to start a new independent business than other employees?).
Method
We operationalize intrapreneurship as employees developing new business
activities for their employer, including establishing a new outlet or subsidiary
and launching new products or product-market combinations (based on e.g.,
Pinchot, 1987; Lumpkin and Dess, 1996). By combining insights from two
sources of literature on employee behavior inside existing organizations, i.e.
proactiveness (Crant, 2000; Parker, Williams and Turner, 2006) and innovative
work behavior (West and Farr, 1990; De Jong, 2007), with insights from the
literature on early-stage entrepreneurial activity (Gartner and Carter, 2003;
Shane, 2003), a detailed list of relevant activities and behavioral aspects of
intrapreneurship was derived. This list provided a basis for a questionnaire,
which was included in the Adult Population Survey (APS) of the Global
Entrepreneurship Monitor 2008. Eleven countries participated in this exploratory
special theme study. The levels of GDP per capita of these countries range from
$7,500 to $55,200. Across these countries, we dispose of a unique sample of
about 15,000 employees who have answered our questions about their
intrapreneurial behavior.
First, the dataset enables us to estimate the prevalence of intrapreneurship in
each of these countries. We also trace the distribution of intrapreneurship across
three firm size classes, five age categories and gender. Next, the micro dataset
includes several qualitative aspects indicating the nature of intrapreneurship,
such as degree of personal risk taking and innovativeness of the new activities.
The dataset also enables us to compare entrepreneurial attitudes, perceptions and
intentions of both intrapreneurs and other employees. Additionally, data at the
5
country level are used for an exploratory analysis of the relationship between the
incidence of intrapreneurship and the level of economic development. Finally,
the relationship between independent entrepreneurship and intrapreneurship is
analysed at the individual as well as at the national level.
Results
At the individual level we find that intrapreneurs are much more likely to have
intentions to start a new independent business than other employees. They also
more often have entrepreneurial perceptions and attitudes. Intrapreneurs more
often than other employees personally know an entrepreneur who recently started
a business, feel they have the required skills to start a business, see good
entrepreneurial opportunities in their environment and believe that fear of failure
would not prevent them from starting a business
However, intrapreneurship is not a very wide-spread phenomenon. On average, less
than 5 percent of employees are found to be intrapreneurs, and in most countries its
incidence in the adult population is significantly lower than that of early-stage
entrepreneurial activity. The prevalence of intrapreneurship is about twice as high in
high income countries as in low income countries. A related outcome is that
intrapreneurship and independent entrepreneurship seem to be substitutes at the macro
level. A possible explanation is a diverging effect of per capita income on these two
different modes of entrepreneurial behavior. First, the level of economic development
has a positive effect on the presence of larger firms (Ghoshal et al., 1999), which
negatively influences the prevalence of independent entrepreneurship in an economy
(Choi and Phan, 2006; Parker, 2009). At the same time the related incidence of
multiperson firms as well as higher levels of autonomy of employees in higher
income countries lead to higher rates of intrapreneurship. In other words: large
organizations in high income countries may be more open to entrepreneurial
behaviour than large firms in low income countries. A second mechanism underlying
substitution between intrapreneurship and independent entrepreneurship at the macro
level is the positive effect of economic development on the opportunity cost of
independent entrepreneurship (Lucas, 1978). Due to rising real wages 'marginal'
entrepreneurs will increasingly opt for a wage job. It seems likely that this mechanism
will also have a positive effect on intrapreneurship.
6
Contents
Summary........................................................................................................................4
1. Introduction................................................................................................................7
2. Defining intrapreneurship..........................................................................................8
3. Research design .........................................................................................................9
4. The prevalence of intrapreneurship .........................................................................12
5. The nature of intrapreneurship.................................................................................15
5.1 Intrapreneurship in practice ...............................................................................15
5.2 Some examples of 'new business activities' .......................................................17
6. Attributes of individual intrapreneurs......................................................................19
7. National level relationships......................................................................................21
8. Conclusions..............................................................................................................24
References....................................................................................................................26
7
1. Introduction
In the past decades both the entrepreneurship and the management literature have
paid increasing attention to entrepreneurship within existing organizations. This
phenomenon is usually called 'corporate entrepreneurship', 'corporate venturing'
or 'intrapreneurship'. Entrepreneurship in existing organizations can be studied at
the individual, the organizational and the macro level. At the organizational
level, research has investigated the formation of new corporate ventures
(emphasizing the differentiation of types of new ventures and their fit with the
corporation; see Kuratko, 2007) and the entrepreneurial organization (mainly
emphasizing the characteristics of such organizations; see Kao, 1991; Lumpkin
and Dess, 1996). At the individual level, the focus has been on the individual
characteristics of the entrepreneurial employee or intrapreneur (Pinchot, 1985)
and the organizational conditions for intrapreneurship (Kanter, 1988). So far
most attempts to study entrepreneurial efforts within organizations have focused
on the antecedents at the organizational level, ignoring the effects of the broader
macro context on intrapreneurship.
This entrepreneurial behaviour within existing firms has remained outside the
lens of empirical research on national variations in entrepreneurship, because
comparable data on intrapreneurship has not been available until now. This lack of
insight into intrapreneurship at the national level is an unwanted state of affairs,
because this ignores a potentially large part of society that is actively involved in
entrepreneurial behaviour. By omitting this entrepreneurial behaviour in society we
run the danger of reaching conclusions on the prevalence and causes of
entrepreneurship that are only based on a limited part of this phenomenon. This is not
only a dangerous academic exercise; it might also lead to false policy
recommendations regarding entrepreneurship.
This paper makes two distinct contributions to the literature. First, it provides
international comparative research on intrapreneurship in low and high income
countries. This makes it possible to trace the effect of the macro context (i.e. levels of
economic development) on the prevalence and nature of intrapreneurship. We expect
that due to the relatively high share of adults formally employed in multiperson
organizations in high income countries (OECD, 2009), that intrapreneurship is more
prevalent in high income countries than in low income countries. In addition we
expect that employees in high income countries will have more autonomy (potentially
related to a relatively high education level) than employees in low income countries,
as is also supported by a very high and positive correlation between per capita income
and Hofstede's index of individualism (Hofstede, 2001: 250-253). Again, this leads to
a higher rate of intrapreneurship in higher income countries, even after controlling for
national firm size distributions. Second, this paper delivers insight into the
relationship between (independent) entrepreneurship and intrapreneurship at the
national level. This makes it possible to discover whether these two types of
entrepreneurial behavior are positively or negatively related. If it is true that
entrepreneurship is an omnipresent aspect of human action, but that its manifestation
depends upon the institutional context
1
, we would expect independent
entrepreneurship and intrapreneurship to be substitutes. In addition, as we also have
1
This institutional context is said to provide an incentive structure that drives individual choices
towards one type of entrepreneurial behaviour in favour of another (cf. Baumol, 1990; Boettke
and Coyne, 2003).
8
individual level data, we are able to trace the relationship between these two types of
entrepreneurial behavior at the individual level as well (i.e. are intrapreneurs more
likely to have intentions to start a new independent business than other employees?).
In the present paper, we first discuss the nature, process and scope of
intrapreneurship. By combining insights from two sources of literature on
employee behavior inside existing organizations, i.e. proactiveness and
innovative work behavior, with insights from the literature on early-stage
entrepreneurial activity we derive a detailed list of relevant activities and
behavioral aspects of intrapreneurship. This list provides a basis for designing
the questionnaire for the first international comparative study of
intrapreneurship, in which eleven countries across a wide range of economic
development levels participated. After discussing the questionnaire and the
sample, we will present the empirical results of this first study into
intrapreneurship across eleven countries.
2. Defining intrapreneurship
2
A special type of entrepreneurship
Intrapreneurship refers to initiatives by employees in organizations to undertake
new business activities. Although intrapreneurship is related to corporate
entrepreneurship, these concepts differ in the following sense. Corporate
entrepreneurship is usually defined at the level of organizations and refers to a
top-down process, i.e. a strategy that management can utilize to foster more
initiatives and/or efforts to achieve improvement from their workforce and
organization. Intrapreneurship relates to the individual level and is about bottom-
up, proactive work-related initiatives of individual employees.
Intrapreneurship is a special type of entrepreneurship and thus shares
many key behavioral characteristics with this comprehensive concept, such as
taking initiative, pursuit of opportunity, and some element of 'newness'. At the
same time, intrapreneurship also belongs to the domain of employee behavior
and thus faces specific limitations that a corporate hierarchy and an intra-
organizational context may impose on individual initiative, as well as specific
possibilities for support that an existing business may offer to a nascent
intrapreneur.
Major activities related to intrapreneurship include opportunity
perception, idea generation, designing a new product or another recombination of
resources, internal coalition building, persuading management, resource
acquisition, planning and organizing. Key behavioral aspects of intrapreneurship
are personal initiative, active information search, out of the box thinking,
voicing, championing, taking charge, finding a way, and some degree of risk
taking (Kanter, 1988, Lumpkin, 2007).
Two phases of intrapreneurship
Pinchot (1987) refers to intrapreneurs as 'dreamers that do'. Accordingly, it is
possible to distinguish between two phases of intrapreneurship, that may be
called 'Vision and imagination' and 'Preparation and emerging exploitation'.
Analytically, this distinction formalizes the sequential nature of the various
2
This section is largely based on De Jong and Wennekers (2008).
9
intrapreneurial activities.
3
Empirically, it helps in assembling relevant items for
measuring intrapreneurship. In practice, these stages may overlap and occur in
cycles, as the perception of an opportunity sometimes follows various
preparatory activities such as product design or networking (see Gartner and
Carter, 2003). The two core elements of intrapreneurship are also strongly linked
as imagination includes exploring possible barriers and problems facing the
project and figuring out various solutions.
The scope of intrapreneurship
As there is a large conceptual diversity in the literature with respect to the
relevant scope of entrepreneurial behavior, this also reflects on any
intrapreneurship concept. There are at least three alternative conceptual
approaches. The first is 'pursuit of entrepreneurial opportunity' (Shane, 2003).
This includes developing a new product or service, a new geographical market or
a new production process in the widest sense. This view probably represents the
most encompassing view of entrepreneurship, as it acknowledges both the
Kirznerian and the Schumpeterian perspective of entrepreneurial opportunities
(Shane, 2003: 35). The second view may be labeled 'new entry' (Lumpkin and
Dess, 1996). New entry includes entering new markets with new products,
entering established markets with new products, or entering new markets with
established goods or services. In the latter case, the venture may be characterized
as replicative rather than innovative. This concept is particularly relevant for
intrapreneurship. Finally, 'new organization creation' (Gartner, 1989) offers a
behavioral view of entrepreneurship as the process by which new organizations
are created. Following this specific view, intrapreneurship could be either
innovative or replicative but should always be concerned with some sort of
'internal start-up' (such as establishing a joint venture, a new subsidiary, a new
outlet or a new business unit).
This conceptual elaboration on the nature, process, and scope of
intrapreneurship provides us with the building blocks for a theory-driven
research design of the international comparative study of intrapreneurship.
3. Research design
The questionnaire
The major goal of this first international comparative study of intrapreneurship is
to obtain more empirical information about entrepreneurial employee activities
across a number of countries. This investigation was carried out as a special
theme study in the framework of the Global Entrepreneurship Monitor 2008. In
total eleven countries participated in this exploratory study of intrapreneurship.
Based on the literature as discussed in the previous section, three elements were
important for designing the questionnaire for our empirical investigation. These
are the scope of intrapreneurship, the phases of the intrapreneurial process, and
the role of intrapreneurial employees in each of these phases. As for the scope,
we have chosen to operationalize intrapreneurship as employees developing new
3
This resembles the sequence of the three entrepreneurial processes opportunity recognition,
evaluation, and exploitation that are seen as the key characteristics of the domain of
entrepreneurship studies by Shane and Venkatamaran (2000).
10
business activities for their employer, including establishing a new outlet or
subsidiary and launching new products or product-market combinations. This
approach is probably closest to the 'new entry view' discussed previously. It is
definitely wider than new organization creation. On the other hand, it excludes
employee initiatives that aim mainly at optimizing internal work processes.
These latter activities belong to the domain of 'innovative work behavior' (De
Jong, 2007)
4
. Next, we distinguish between two phases in the intrapreneurial
process, i.e., idea development for new business activities, and preparation and
(emerging) exploitation of these new activities. As for the role of intrapreneurs
in each of these phases we distinguish between leading and supporting roles.
Based on these elements we conceive a broad and a narrow definition of
intrapreneurship. According to our broad definition intrapreneurs are employees
who, in the past two years, have been actively involved in and have had a leading
role in at least one of these phases. According to our narrow definition
intrapreneurs have a leading role in both phases of the intrapreneurial process.
See the scheme in Figure 1 for a clarification.
Figure 1 Broad and narrow definitions of intrapreneurship used in this study
Subsequently, all intrapreneurs that fitted our narrow definition were asked some
further questions about their 'most significant new business activity' in the past
two years. Firstly, some questions were asked concerning various aspects of the
intrapreneurial process, including whether the new business activity was the
intrapreneur's own initiative, whether he/she had to overcome internal resistance
and whether he/she personally had to take risks to become involved in the new
activity. Secondly, it was also asked whether the new business activity involves a
new product or service. Finally, as the intrapreneurship questionnaire was part of
GEM's Adult Population Survey (APS) as a whole (see Reynolds et al. 2005), all
these results could be linked to other relevant characteristics of the intrapreneurs,
including their perceptions and attitudes as well as their intentions to start a
business of their own within the next three years.
4
Intrapreneurship and innovative work behavior overlap, but they are not identical.
Involved in
development business
ideas?
Employee,
18-64 years
yes
Actively involved in
phase of idea
development?
Actively involved in
phase of preparation and
exploitation?
Intrapreneurship Broad
definition: leading role in
at least one of the two
phases
Intrapreneurship Narrow
definition: leading role in
both of the two phases
Leading role?
Leading role?
yes
yes
11
The sample
Table 1 presents some characteristics of the eleven countries that participated in
the GEM survey on intrapreneurship. These include GDP per capita and
population size. The levels of GDP per capita range from $7,500 (Ecuador) to
$55,200 (Norway). We used the GDP per capita levels to distinguish four high
and seven low income countries. As might be expected, the low income countries
have relatively low (formal) employment rates in comparison with the high
income countries. This is probably due to the large informal economies in low
income countries. The two outliers in these groups are Latvia with a relatively
high employment rate in the sample (73%), and the Republic of Korea with a
relatively low employment rate (55%).
Table 1 Characteristics of GEM countries participating in intrapreneurship
investigation
Countries
GDP per
capita ($)
Population
size (X 1,000)
Sample size
adult
population
18-64 years
Number of
employees in
sample
Employees
as % of adult
population
Low income
countries
Brazil 10,300 191,900 2,000 1,162 58
Chile 14,700 16,400 1,828 1,124 61
Ecuador 7,500 13,900 2,142 557 26
Iran 12,400 65,900 3,119 1,146 37
Latvia 17,800 2,400 2,011 1,477 73
Peru 8,600 29,000 1,990 1,189 60
Uruguay 12,700 3,500 1,645 1,104 67
High income
countries
Korea Republic 26,300 48,400 2,000 1,102 55
Netherlands 40,400 16,600 2,534 2,024 80
Norway 55,200 4,600 1,614 1,241 77
Spain* 30,800 40,500 2,597* 2,000 77*
* Spain selected a random sample of employees within a much larger sample of adults. The
corresponding number of the adult population 18-64 years is an estimate based on an
employment rate of 77% (obtained from IMD (2008) The World Competitiveness Yearbook
and US Bureau of the Census, International Database (IDB)).
Source: Global Entrepreneurship Monitor 2008
In these eleven countries the survey on intrapreneurship involved all respondents to
the Adult Population Survey who had indicated that they were currently employed but
did not work as the owner-manager of a business. As can be seen in Table 1, it will
thus be possible to express the prevalence of intrapreneurship as either a percentage of
the number of employees or, alternatively, as a percentage of the adult population
between 18 and 64 years of age.
12
4. The prevalence of intrapreneurship
Table 2 presents the main results regarding the prevalence of intrapreneurship
according to our narrow and broad definition, both as percentage of the number
of employees and as percentage of the adult population between 18 and 64 years
of age. A first observation is that intrapreneurship, as defined in this report, is
not a very wide-spread phenomenon. On average, fewer than 5% of employees
are intrapreneurs, even according to our broad definition. In addition, its
incidence in the adult population is, on average, significantly lower than that of
early-stage entrepreneurial activity. This suggests that - if we assume that early-
stage entrepreneurial activity and intrapreneurship are both part of a larger
category of entrepreneurial behavior - early-stage entrepreneurial activity is a
more frequent expression of entrepreneurial behavior than intrapreneurship is
(see also section 7).
A second observation is that intrapreneurs seem to be roughly twice as prevalent
in high income countries as in low income countries. This pattern is the reverse
of that for early-stage entrepreneurial activity, which is more abundant in low
income countries. One important explanation of these findings may be the
relatively high share of adults employed in multiperson organizations in high
income countries. Another explanation has to do with rising opportunity cost of
entrepreneurship with rising per capita income (see also section 7).
13
Table 2 Prevalence of intrapreneurship in ten countries, 2008
Intrapreneurship narrow
definition in
Intrapreneurship broad
definition in
% employees
% adult
population
%
employees
% adult
population
Low income countries
Brazil 1.1 0.7 1.5 0.9
Chile 3.4 2.2 5.2 3.5
Ecuador 1.0 0.3 2.1 0.6
Iran 0.6 0.1 1.2 1.4
Latvia 1.1 0.8 1.8 1.3
Peru 1.6 1.0 3.2 1.9
Uruguay 1.9 1.3 4.5 3.0
unweighted average 1.5 0.9 2.8 1.8
High income countries
Korea Republic 1.2 0.7 2.0 1.1
Netherlands 3.5 2.7 7.2 5.5
Norway 4.2 3.2 7.4 5.7
Spain 2.0 1.5 3.4 2.6
unweighted average 2.7 2.0 5.0 3.7
Total unweighted
average 1.9 1.3 3.5 2.4
Source: Global Entrepreneurship Monitor 2008
Respondents were also asked whether the organization
5
they were
working for employed fewer than 10, between 10 and 250, or more than 250
employees. In this way we can trace whether in addition to the relatively high
share of adults employed in multiperson organizations in high income countries,
the nature of the employment within the medium- and large organization size
segments is also different between high and low income countries. Table 3
presents the intrapreneurship prevalence rates according to our narrow definition.
Apparently intrapreneurs are present in organizations within all size classes. For
high income countries it appears that the size class of the firm does not
differentiate the intrapreneurship rates: the rate equals about 3% for all three size
5
These organizations include private businesses as well as organizations in the (semi-)public
sector. Self-employed have not been asked this question. We made the assumption that these
persons are active in the small business sector.
14
classes.
6
Only in the Netherlands we found a significant deviation: intrapreneurs
in the Netherlands are more often found in small firms (7.2% versus 3.5% and
3.3% in respectively medium- and large-sized firms). In low income countries
intrapreneurship seems to be underrepresented in medium-sized businesses and
relatively prominent in (the very small number of) large organizations.
Table 3 Prevalence of intrapreneurship (narrow definition) across firm size classes
< 10
employees
10 - 249
employees
> 250
employees
Total
Low income countries 1.1 2.1 3.4 1.8
High income countries 2.2 2.7 3.0 2.6
All countries 1.4 2.5 3.2 2.2
Source: Global Entrepreneurship Monitor 2008
Figure 2 Intrapreneurship rates (narrow definition, percentage of employed) by country group,
age and gender
Figure 2 presents the prevalence of intrapreneurship by age category and gender, for
low and high income countries. The relatively low number of intrapreneurs in the 18-
24 years group in high income countries may be related to longer education careers in
high income countries causing a differential effect on the composition of the
6
Organizations (private and public) with more than 250 employees are more prevalent in high
income countries than in low income countries. The relatively low percentage of
intrapreneurship in large organizations in high income countries might be explained by the
dominance of public sector organizations in this size segment.
0
1
2
3
4
18-24
years
25-34
years
35-44
years
45-54
years
55-64
years
male female
age categories gender
Low income countries High income countries
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15
employed in this age group. There seems to be less of a gender bias in
intrapreneurship in low income countries than in high income countries.
5. The nature of intrapreneurship
5.1 Intrapreneurship in practice
In this section we explore some key characteristics of intrapreneurship. Table 4
presents the results with respect to the most significant new business activity in
which intrapreneurs, as defined according to our narrow definition, have been
involved during the past two years. In the first column it is shown that more
often than not, these intrapreneurs became involved in developing the new
business idea, acting on their own initiative rather than because they were asked
to do so by their manager or another colleague. The incidence of own initiative
seems to be somewhat higher in high income countries than in low income
countries. This suggests that the relatively low levels of autonomy in low income
countries affect both the prevalence and nature of intrapreneurship in these
countries.
The second column shows that, on average, about 50% of all intrapreneurs have
had to overcome some kind of internal resistance in developing the new business
activity. This element deserves further scrutiny in a future study.
In addition, risk taking is a well-known core characteristic of entrepreneurship.
From the third column it appears that, on average across the eleven participating
countries, about one-third of intrapreneurs report having taken personal risks in
becoming involved in the new business activity. However, the incidence of
personal risk taking appears to be much lower in high income countries than in
low income countries. This suggests that intrapreneurship is a much more
daunting activity in low income countries than in high income countries. To
examine this in somewhat more detail, four types of risk were identified: loss of
status, damage to career, loss of job and loss of own money invested in new
activity. It appears that personal risk most often relates to the possible loss of
own money that is invested in the new activity, for both country groups. Loss of
status was mentioned more often in high income countries, whereas loss of job
was mentioned more often in low income countries.
Finally, it was found that about half of the intrapreneurs developed new business
activities involving a product or service that was new to the intrapreneur's
organization. The innovativeness of these activities does not clearly differ
between high and low income countries. Both categories include countries with
relatively many innovative intrapreneurs: Chile and Latvia in the low income
group (both 71%), and Norway (65%) and the Netherlands (58%) in the high
income group. Information about newness to customers and newness for the
industry is available for both intrapreneurs and early-stage entrepreneurs. In high
income countries, 13% of the early-stage entrepreneurs believe that their product
is new to all customers, while this holds for 26% of the intrapreneurs. Both
figures are somewhat higher in low income countries. However, the
intrapreneurs and early-stage entrepreneurs in high income countries perceive
similar degrees of newness for the industry: 7% of the intrapreneurs, against
16
10% for the early-stage entrepreneurs, see no existing competitors for their
product. These figures are not very different in low income countries.
Table 4 Some characteristics of intrapreneurship (narrow definition) in eleven countries,
2008, as percentage of the total number of intrapreneurs
% own
initiative
%
overcoming
internal
resistance
% taking any
risks
personally
% new
product or
service
Low income countries
Peru 71 71 71 50
Brazil 36 45 27 45
Chile 39 25 66 71
Iran 50 53 86 71
Latvia 57 57 43 71
Ecuador 25 75 67 33
Uruguay 40 50 40 40
unweighted average 45 53 53 52
High income countries
Netherlands 60 56 30 58
Spain 73 40 18 28
Norway 48 48 28 65
Korea Republic 50 50 25 N/A
unweighted average 58 49 25 38
Total unweighted
average 50 51 42 46
Source: Global Entrepreneurship Monitor 2008
Table 5 presents the job growth expectations for new business activities by
intrapreneurs, nascent entrepreneurs and owner-managers of young firms, by country
group. Intrapreneurs have clearly higher job growth expectations than independent
entrepreneurs, suggesting higher aspiration levels of intrapreneurs and/or better access
to resources for achieving growth. Both intrapreneurs and independent entrepreneurs
have higher job growth expectations in low income countries than their counterparts
in high income countries.
17
Table 5 Distribution of job growth expectation of intrapreneurs, nascent entrepreneurs and
owner-managers of young firms, by country group, 2008
up to 1
employee 2-5 employees
6-19
employees
>20
employees
Low income countries
intrapreneurs 2 21 27 50
nascent entrepreneurs 13 49 26 12
baby business owners 30 38 20 12
High income countries
intrapreneurs 12 24 33 31
nascent entrepreneurs 32 33 20 15
baby business owners 37 37 16 11
5.2 Some examples of 'new business activities'
To get an idea of the business activities the intrapreneurs are actually involved in, an
open ended question was phrased. Here the intrapreneurs were asked to briefly
describe the most significant new business activity in which they had been actively
involved in the past two years. Table 6 displays the responses from the Dutch sample
and has been categorised into activities involving (i) new products and services; (ii)
new markets, outlets, or establishments; and (iii) new production processes.
The large majority of new business activities in this sample are oriented towards the
market, by introducing new products and services, by entering new markets or by
establishing new outlets or establishments. Most of these activities fit best under the
heading of 'new entry', as discussed in a previous section, while a fair number belong
to the domain of 'new organization creation'. Just below 25% of the new business
activities in the Dutch sample have to do with developing and/or introducing new
production processes. It would require a more in-depth investigation to find out to
what extent these latter activities truly represent 'pursuit of entrepreneurial
opportunity' or rather are examples of 'innovative work behaviour'
7
. A final
observation is that a number of new business activities in the Dutch sample are in the
area of education, health care or social services. In sofar as some of these activities
may possibly be 'not-for-profit', these may also be viewed as examples of 'social
intrapreneurship'.
7
For a discussion of differences and similarities of intrapreneurship and innovative work
behaviour, see De Jong and Wennekers (2008).
18
Table 6 Categorization of new business activities mentioned by Dutch intrapreneurs, 2008
New products and services New markets, outlets, establishments New production
processes
Consultancy, business to business,
business take-overs
To merge two independent institutions. Digital printing
To set up training program,
exercise program, for people with
lung disorders.
Company for leasing and financing
cars.
To be able to train
students on the job.
Introduction of new products.
Making/producing and importing
products. We are expanding to Asia.
Innovations in
education.
Training and communication
services.
To set up new offices abroad.
I am outsourcing
activities.
Expanding services. Started a cooperation with another firm
Starting a production
line.
Started a new training. Investment company
To get more money by
creative thinking.
Starting a new department for
assurance products/services.
Foundation of Good Ideas: to give a
chance to ideas that are difficult to
develop.
R&D
To develop and promote a new,
state subsidized scheme.
We build satellites of our own company
all over the country: a kind of "Shop in
shop" concept.
To introduce a new and
faster internet
connection.
Manager in a dolphin house,
thinking up and promoting new
shows with animals, new
animation programs for children.
Taken over companies
New automated ticket
selling system.
Positioning business intelligence
by means of the newest Microsoft
technologies.
Starting a new company in Romania.
Importing more from
China and Japan.
To introduce a new insurance
product for private persons.
Telemarketing.
Development of
maintenance plan.
Expand the present company with
consultancy on privatization of
public services.
Marketing, developing products,
promotion and selling a sales channel
for barbecues.
New
stockroom/warehouse.
To launch a new product
Finding a new market for existing
products, optical products.
To start/introduce a new product
in our branch, thermal printer
heads.
Starting a new sports centre.
Social and domestic services
To seek a market, to seek partners, to
maintain/keep accounts.
To give workshops.
Setting up an office abroad, part of a
university.
Agency to support clients with physical
defects
To start a clinic for people with mental
defects and psychiatric problems.
To organize distribution in China
Starting a new company selling
products on the internet.
Starting new sites and establishments.
Starting a new establishment.
To start new establishments.
Business for welfare/social work.
Source: Global Entrepreneurship Monitor 2008
Note: out of 63 responses, six could not be coded into either of these categories, while five were
unable or not willing to provide a description
19
6. Attributes of individual intrapreneurs
In Table 7 we have studied the attributes of individual intrapreneurs, across all
countries, for low and high income countries separately. Intrapreneurship seems
to be a suitable springboard to independent entrepreneurship, even more so in
low income countries than in high income countries. The latter observation is
especially reflected in the very high levels of perceived entrepreneurial skill
(94%) and opportunity (50%) levels of intrapreneurs, even higher than the
already high levels in the overall employed population in low income countries.
Table 7 Relationship between intrapreneurship and entrepreneurial perceptions at individual
level, 2008
Low income countries High income countries
% of
intrapreneurs
% of other
employees
% of
intrapreneurs
% of other
employees
You personally know an
entrepreneur who recently
started a business
59 46 54 33
You have the required skills
and knowledge to start a firm
94 60 62 44
There are good opportunities
for starting a business in the
area where you live
50 35 33 25
Fear of failure would not
prevent you from starting a
business
76 65 65 56
Source: Global Entrepreneurship Monitor 2008
Note: numbers in italics denote significant differences between intrapreneurs and other
employed (p
During this brief information in regard to intrapreneursh ip an internat iona l study.
Niels Bosma
Erik Stam
Sander Wennekers
Zoetermeer, January 2010
Intrapreneurship - An international study
2
EIM Research Reports
reference number H201005
publication January 2010
emailaddress corresponding author [email protected]
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3
Intrapreneurship - An international study
Niels Bosma
a, b
, Erik Stam
a, c, d, e
and Sander Wennekers
f
a
Utrecht University
b
Global Entrepreneurship Research Association
c
WRR (Scientific Council for Government Policy)
d
University of Cambridge
e
Max Planck Institute of Economics
f
EIM Business and Policy Research
Abstract
This paper presents the first results of a novel international comparative study of
intrapreneurship, i.e., employees developing new business activities for their
employer. This study is based on an exploratory investigation in the framework
of the Global Entrepreneurship Monitor 2008, in which eleven countries
participated. First, it was found that, on average, less than 5 percent of
employees are intrapreneurs, and that in most countries its incidence in the adult
population is significantly lower than that of early-stage entrepreneurial activity.
In addition, the prevalence of intrapreneurship is about twice as high in high
income countries as in low income countries, which is probably caused by a
combination of a relatively high share of adults employed in multiperson
organizations in high income countries and higher levels of autonomy of
employees in these countries. Second, the relationship between intrapreneurship
and independent entrepreneurship is analysed at the micro (individual) level as
well as at the national level. We find that at the individual level, intrapreneurs
are much more likely to have intentions to start a new independent business than
other employees. However, there is a negative correlation between
intrapreneurship and early-stage entrepreneurial activity at the macro level. One
explanation for these contrasting outcomes is the diverging effect of per capita
income on intrapreneurship (positive effect) and early-stage entrepreneurial
activity (negative effect).
Keywords: intrapreneurship, entrepreneurial employee behavior, entrepreneurship, economic
development
Contact: Niels Bosma, mailto:[email protected].
Version: 12 January 2010, EIM Research Report Intrapreneurship_v9.doc.
Acknowledgement:
This paper is part of the Research Program SCALES carried out by EIM and financed by the
Dutch Ministry of Economic Affairs. It is based on an exploratory investigation in the
framework of the Global Entrepreneurship Monitor 2008. An early version has been read at a
research seminar at Utrecht University on 23 October 2009. The authors thank GEM
researchers and their sponsors (www.gemconsortium.org) for making this research possible.
Nations participating in this 2008 special GEM survey were Brazil, Chile, Ecuador, Iran,
Republic of Korea, Latvia, the Netherlands, Norway, Peru, Spain, and Uruguay.
4
Summary
In the past decades both the entrepreneurship and the management literature have
paid increasing attention to entrepreneurship within existing organizations (Kao,
1991; Lumpkin and Dess, 1996; Shane, 2003). This phenomenon is usually
called 'corporate entrepreneurship', 'corporate venturing' or 'intrapreneurship'.
Entrepreneurship in existing organizations can be studied at the individual, the
organizational and the macro level. So far most attempts to study entrepreneurial
efforts within organizations have ignored the potentially important effects of the
broader macro context on intrapreneurship. Consequently research into the
relationship between intrapreneurship and independent entrepreneurship at the
macro level is also lacking.
This paper presents the first results of a novel international comparative study of
intrapreneurship at the individual level across eleven countries. The paper makes
two contributions to the literature. First, it provides international comparative
research on intrapreneurship in low and high income countries. This makes it
possible to trace the effect of the macro context (i.e. levels of economic
development) on the prevalence and nature of intrapreneurship. Second, the
paper delivers insight into the relationship between independent entrepreneurship
and intrapreneurship at the national level (i.e., are they substitutes or
complements?) as well as the individual level (i.e., are intrapreneurs more likely
to have intentions to start a new independent business than other employees?).
Method
We operationalize intrapreneurship as employees developing new business
activities for their employer, including establishing a new outlet or subsidiary
and launching new products or product-market combinations (based on e.g.,
Pinchot, 1987; Lumpkin and Dess, 1996). By combining insights from two
sources of literature on employee behavior inside existing organizations, i.e.
proactiveness (Crant, 2000; Parker, Williams and Turner, 2006) and innovative
work behavior (West and Farr, 1990; De Jong, 2007), with insights from the
literature on early-stage entrepreneurial activity (Gartner and Carter, 2003;
Shane, 2003), a detailed list of relevant activities and behavioral aspects of
intrapreneurship was derived. This list provided a basis for a questionnaire,
which was included in the Adult Population Survey (APS) of the Global
Entrepreneurship Monitor 2008. Eleven countries participated in this exploratory
special theme study. The levels of GDP per capita of these countries range from
$7,500 to $55,200. Across these countries, we dispose of a unique sample of
about 15,000 employees who have answered our questions about their
intrapreneurial behavior.
First, the dataset enables us to estimate the prevalence of intrapreneurship in
each of these countries. We also trace the distribution of intrapreneurship across
three firm size classes, five age categories and gender. Next, the micro dataset
includes several qualitative aspects indicating the nature of intrapreneurship,
such as degree of personal risk taking and innovativeness of the new activities.
The dataset also enables us to compare entrepreneurial attitudes, perceptions and
intentions of both intrapreneurs and other employees. Additionally, data at the
5
country level are used for an exploratory analysis of the relationship between the
incidence of intrapreneurship and the level of economic development. Finally,
the relationship between independent entrepreneurship and intrapreneurship is
analysed at the individual as well as at the national level.
Results
At the individual level we find that intrapreneurs are much more likely to have
intentions to start a new independent business than other employees. They also
more often have entrepreneurial perceptions and attitudes. Intrapreneurs more
often than other employees personally know an entrepreneur who recently started
a business, feel they have the required skills to start a business, see good
entrepreneurial opportunities in their environment and believe that fear of failure
would not prevent them from starting a business
However, intrapreneurship is not a very wide-spread phenomenon. On average, less
than 5 percent of employees are found to be intrapreneurs, and in most countries its
incidence in the adult population is significantly lower than that of early-stage
entrepreneurial activity. The prevalence of intrapreneurship is about twice as high in
high income countries as in low income countries. A related outcome is that
intrapreneurship and independent entrepreneurship seem to be substitutes at the macro
level. A possible explanation is a diverging effect of per capita income on these two
different modes of entrepreneurial behavior. First, the level of economic development
has a positive effect on the presence of larger firms (Ghoshal et al., 1999), which
negatively influences the prevalence of independent entrepreneurship in an economy
(Choi and Phan, 2006; Parker, 2009). At the same time the related incidence of
multiperson firms as well as higher levels of autonomy of employees in higher
income countries lead to higher rates of intrapreneurship. In other words: large
organizations in high income countries may be more open to entrepreneurial
behaviour than large firms in low income countries. A second mechanism underlying
substitution between intrapreneurship and independent entrepreneurship at the macro
level is the positive effect of economic development on the opportunity cost of
independent entrepreneurship (Lucas, 1978). Due to rising real wages 'marginal'
entrepreneurs will increasingly opt for a wage job. It seems likely that this mechanism
will also have a positive effect on intrapreneurship.
6
Contents
Summary........................................................................................................................4
1. Introduction................................................................................................................7
2. Defining intrapreneurship..........................................................................................8
3. Research design .........................................................................................................9
4. The prevalence of intrapreneurship .........................................................................12
5. The nature of intrapreneurship.................................................................................15
5.1 Intrapreneurship in practice ...............................................................................15
5.2 Some examples of 'new business activities' .......................................................17
6. Attributes of individual intrapreneurs......................................................................19
7. National level relationships......................................................................................21
8. Conclusions..............................................................................................................24
References....................................................................................................................26
7
1. Introduction
In the past decades both the entrepreneurship and the management literature have
paid increasing attention to entrepreneurship within existing organizations. This
phenomenon is usually called 'corporate entrepreneurship', 'corporate venturing'
or 'intrapreneurship'. Entrepreneurship in existing organizations can be studied at
the individual, the organizational and the macro level. At the organizational
level, research has investigated the formation of new corporate ventures
(emphasizing the differentiation of types of new ventures and their fit with the
corporation; see Kuratko, 2007) and the entrepreneurial organization (mainly
emphasizing the characteristics of such organizations; see Kao, 1991; Lumpkin
and Dess, 1996). At the individual level, the focus has been on the individual
characteristics of the entrepreneurial employee or intrapreneur (Pinchot, 1985)
and the organizational conditions for intrapreneurship (Kanter, 1988). So far
most attempts to study entrepreneurial efforts within organizations have focused
on the antecedents at the organizational level, ignoring the effects of the broader
macro context on intrapreneurship.
This entrepreneurial behaviour within existing firms has remained outside the
lens of empirical research on national variations in entrepreneurship, because
comparable data on intrapreneurship has not been available until now. This lack of
insight into intrapreneurship at the national level is an unwanted state of affairs,
because this ignores a potentially large part of society that is actively involved in
entrepreneurial behaviour. By omitting this entrepreneurial behaviour in society we
run the danger of reaching conclusions on the prevalence and causes of
entrepreneurship that are only based on a limited part of this phenomenon. This is not
only a dangerous academic exercise; it might also lead to false policy
recommendations regarding entrepreneurship.
This paper makes two distinct contributions to the literature. First, it provides
international comparative research on intrapreneurship in low and high income
countries. This makes it possible to trace the effect of the macro context (i.e. levels of
economic development) on the prevalence and nature of intrapreneurship. We expect
that due to the relatively high share of adults formally employed in multiperson
organizations in high income countries (OECD, 2009), that intrapreneurship is more
prevalent in high income countries than in low income countries. In addition we
expect that employees in high income countries will have more autonomy (potentially
related to a relatively high education level) than employees in low income countries,
as is also supported by a very high and positive correlation between per capita income
and Hofstede's index of individualism (Hofstede, 2001: 250-253). Again, this leads to
a higher rate of intrapreneurship in higher income countries, even after controlling for
national firm size distributions. Second, this paper delivers insight into the
relationship between (independent) entrepreneurship and intrapreneurship at the
national level. This makes it possible to discover whether these two types of
entrepreneurial behavior are positively or negatively related. If it is true that
entrepreneurship is an omnipresent aspect of human action, but that its manifestation
depends upon the institutional context
1
, we would expect independent
entrepreneurship and intrapreneurship to be substitutes. In addition, as we also have
1
This institutional context is said to provide an incentive structure that drives individual choices
towards one type of entrepreneurial behaviour in favour of another (cf. Baumol, 1990; Boettke
and Coyne, 2003).
8
individual level data, we are able to trace the relationship between these two types of
entrepreneurial behavior at the individual level as well (i.e. are intrapreneurs more
likely to have intentions to start a new independent business than other employees?).
In the present paper, we first discuss the nature, process and scope of
intrapreneurship. By combining insights from two sources of literature on
employee behavior inside existing organizations, i.e. proactiveness and
innovative work behavior, with insights from the literature on early-stage
entrepreneurial activity we derive a detailed list of relevant activities and
behavioral aspects of intrapreneurship. This list provides a basis for designing
the questionnaire for the first international comparative study of
intrapreneurship, in which eleven countries across a wide range of economic
development levels participated. After discussing the questionnaire and the
sample, we will present the empirical results of this first study into
intrapreneurship across eleven countries.
2. Defining intrapreneurship
2
A special type of entrepreneurship
Intrapreneurship refers to initiatives by employees in organizations to undertake
new business activities. Although intrapreneurship is related to corporate
entrepreneurship, these concepts differ in the following sense. Corporate
entrepreneurship is usually defined at the level of organizations and refers to a
top-down process, i.e. a strategy that management can utilize to foster more
initiatives and/or efforts to achieve improvement from their workforce and
organization. Intrapreneurship relates to the individual level and is about bottom-
up, proactive work-related initiatives of individual employees.
Intrapreneurship is a special type of entrepreneurship and thus shares
many key behavioral characteristics with this comprehensive concept, such as
taking initiative, pursuit of opportunity, and some element of 'newness'. At the
same time, intrapreneurship also belongs to the domain of employee behavior
and thus faces specific limitations that a corporate hierarchy and an intra-
organizational context may impose on individual initiative, as well as specific
possibilities for support that an existing business may offer to a nascent
intrapreneur.
Major activities related to intrapreneurship include opportunity
perception, idea generation, designing a new product or another recombination of
resources, internal coalition building, persuading management, resource
acquisition, planning and organizing. Key behavioral aspects of intrapreneurship
are personal initiative, active information search, out of the box thinking,
voicing, championing, taking charge, finding a way, and some degree of risk
taking (Kanter, 1988, Lumpkin, 2007).
Two phases of intrapreneurship
Pinchot (1987) refers to intrapreneurs as 'dreamers that do'. Accordingly, it is
possible to distinguish between two phases of intrapreneurship, that may be
called 'Vision and imagination' and 'Preparation and emerging exploitation'.
Analytically, this distinction formalizes the sequential nature of the various
2
This section is largely based on De Jong and Wennekers (2008).
9
intrapreneurial activities.
3
Empirically, it helps in assembling relevant items for
measuring intrapreneurship. In practice, these stages may overlap and occur in
cycles, as the perception of an opportunity sometimes follows various
preparatory activities such as product design or networking (see Gartner and
Carter, 2003). The two core elements of intrapreneurship are also strongly linked
as imagination includes exploring possible barriers and problems facing the
project and figuring out various solutions.
The scope of intrapreneurship
As there is a large conceptual diversity in the literature with respect to the
relevant scope of entrepreneurial behavior, this also reflects on any
intrapreneurship concept. There are at least three alternative conceptual
approaches. The first is 'pursuit of entrepreneurial opportunity' (Shane, 2003).
This includes developing a new product or service, a new geographical market or
a new production process in the widest sense. This view probably represents the
most encompassing view of entrepreneurship, as it acknowledges both the
Kirznerian and the Schumpeterian perspective of entrepreneurial opportunities
(Shane, 2003: 35). The second view may be labeled 'new entry' (Lumpkin and
Dess, 1996). New entry includes entering new markets with new products,
entering established markets with new products, or entering new markets with
established goods or services. In the latter case, the venture may be characterized
as replicative rather than innovative. This concept is particularly relevant for
intrapreneurship. Finally, 'new organization creation' (Gartner, 1989) offers a
behavioral view of entrepreneurship as the process by which new organizations
are created. Following this specific view, intrapreneurship could be either
innovative or replicative but should always be concerned with some sort of
'internal start-up' (such as establishing a joint venture, a new subsidiary, a new
outlet or a new business unit).
This conceptual elaboration on the nature, process, and scope of
intrapreneurship provides us with the building blocks for a theory-driven
research design of the international comparative study of intrapreneurship.
3. Research design
The questionnaire
The major goal of this first international comparative study of intrapreneurship is
to obtain more empirical information about entrepreneurial employee activities
across a number of countries. This investigation was carried out as a special
theme study in the framework of the Global Entrepreneurship Monitor 2008. In
total eleven countries participated in this exploratory study of intrapreneurship.
Based on the literature as discussed in the previous section, three elements were
important for designing the questionnaire for our empirical investigation. These
are the scope of intrapreneurship, the phases of the intrapreneurial process, and
the role of intrapreneurial employees in each of these phases. As for the scope,
we have chosen to operationalize intrapreneurship as employees developing new
3
This resembles the sequence of the three entrepreneurial processes opportunity recognition,
evaluation, and exploitation that are seen as the key characteristics of the domain of
entrepreneurship studies by Shane and Venkatamaran (2000).
10
business activities for their employer, including establishing a new outlet or
subsidiary and launching new products or product-market combinations. This
approach is probably closest to the 'new entry view' discussed previously. It is
definitely wider than new organization creation. On the other hand, it excludes
employee initiatives that aim mainly at optimizing internal work processes.
These latter activities belong to the domain of 'innovative work behavior' (De
Jong, 2007)
4
. Next, we distinguish between two phases in the intrapreneurial
process, i.e., idea development for new business activities, and preparation and
(emerging) exploitation of these new activities. As for the role of intrapreneurs
in each of these phases we distinguish between leading and supporting roles.
Based on these elements we conceive a broad and a narrow definition of
intrapreneurship. According to our broad definition intrapreneurs are employees
who, in the past two years, have been actively involved in and have had a leading
role in at least one of these phases. According to our narrow definition
intrapreneurs have a leading role in both phases of the intrapreneurial process.
See the scheme in Figure 1 for a clarification.
Figure 1 Broad and narrow definitions of intrapreneurship used in this study
Subsequently, all intrapreneurs that fitted our narrow definition were asked some
further questions about their 'most significant new business activity' in the past
two years. Firstly, some questions were asked concerning various aspects of the
intrapreneurial process, including whether the new business activity was the
intrapreneur's own initiative, whether he/she had to overcome internal resistance
and whether he/she personally had to take risks to become involved in the new
activity. Secondly, it was also asked whether the new business activity involves a
new product or service. Finally, as the intrapreneurship questionnaire was part of
GEM's Adult Population Survey (APS) as a whole (see Reynolds et al. 2005), all
these results could be linked to other relevant characteristics of the intrapreneurs,
including their perceptions and attitudes as well as their intentions to start a
business of their own within the next three years.
4
Intrapreneurship and innovative work behavior overlap, but they are not identical.
Involved in
development business
ideas?
Employee,
18-64 years
yes
Actively involved in
phase of idea
development?
Actively involved in
phase of preparation and
exploitation?
Intrapreneurship Broad
definition: leading role in
at least one of the two
phases
Intrapreneurship Narrow
definition: leading role in
both of the two phases
Leading role?
Leading role?
yes
yes
11
The sample
Table 1 presents some characteristics of the eleven countries that participated in
the GEM survey on intrapreneurship. These include GDP per capita and
population size. The levels of GDP per capita range from $7,500 (Ecuador) to
$55,200 (Norway). We used the GDP per capita levels to distinguish four high
and seven low income countries. As might be expected, the low income countries
have relatively low (formal) employment rates in comparison with the high
income countries. This is probably due to the large informal economies in low
income countries. The two outliers in these groups are Latvia with a relatively
high employment rate in the sample (73%), and the Republic of Korea with a
relatively low employment rate (55%).
Table 1 Characteristics of GEM countries participating in intrapreneurship
investigation
Countries
GDP per
capita ($)
Population
size (X 1,000)
Sample size
adult
population
18-64 years
Number of
employees in
sample
Employees
as % of adult
population
Low income
countries
Brazil 10,300 191,900 2,000 1,162 58
Chile 14,700 16,400 1,828 1,124 61
Ecuador 7,500 13,900 2,142 557 26
Iran 12,400 65,900 3,119 1,146 37
Latvia 17,800 2,400 2,011 1,477 73
Peru 8,600 29,000 1,990 1,189 60
Uruguay 12,700 3,500 1,645 1,104 67
High income
countries
Korea Republic 26,300 48,400 2,000 1,102 55
Netherlands 40,400 16,600 2,534 2,024 80
Norway 55,200 4,600 1,614 1,241 77
Spain* 30,800 40,500 2,597* 2,000 77*
* Spain selected a random sample of employees within a much larger sample of adults. The
corresponding number of the adult population 18-64 years is an estimate based on an
employment rate of 77% (obtained from IMD (2008) The World Competitiveness Yearbook
and US Bureau of the Census, International Database (IDB)).
Source: Global Entrepreneurship Monitor 2008
In these eleven countries the survey on intrapreneurship involved all respondents to
the Adult Population Survey who had indicated that they were currently employed but
did not work as the owner-manager of a business. As can be seen in Table 1, it will
thus be possible to express the prevalence of intrapreneurship as either a percentage of
the number of employees or, alternatively, as a percentage of the adult population
between 18 and 64 years of age.
12
4. The prevalence of intrapreneurship
Table 2 presents the main results regarding the prevalence of intrapreneurship
according to our narrow and broad definition, both as percentage of the number
of employees and as percentage of the adult population between 18 and 64 years
of age. A first observation is that intrapreneurship, as defined in this report, is
not a very wide-spread phenomenon. On average, fewer than 5% of employees
are intrapreneurs, even according to our broad definition. In addition, its
incidence in the adult population is, on average, significantly lower than that of
early-stage entrepreneurial activity. This suggests that - if we assume that early-
stage entrepreneurial activity and intrapreneurship are both part of a larger
category of entrepreneurial behavior - early-stage entrepreneurial activity is a
more frequent expression of entrepreneurial behavior than intrapreneurship is
(see also section 7).
A second observation is that intrapreneurs seem to be roughly twice as prevalent
in high income countries as in low income countries. This pattern is the reverse
of that for early-stage entrepreneurial activity, which is more abundant in low
income countries. One important explanation of these findings may be the
relatively high share of adults employed in multiperson organizations in high
income countries. Another explanation has to do with rising opportunity cost of
entrepreneurship with rising per capita income (see also section 7).
13
Table 2 Prevalence of intrapreneurship in ten countries, 2008
Intrapreneurship narrow
definition in
Intrapreneurship broad
definition in
% employees
% adult
population
%
employees
% adult
population
Low income countries
Brazil 1.1 0.7 1.5 0.9
Chile 3.4 2.2 5.2 3.5
Ecuador 1.0 0.3 2.1 0.6
Iran 0.6 0.1 1.2 1.4
Latvia 1.1 0.8 1.8 1.3
Peru 1.6 1.0 3.2 1.9
Uruguay 1.9 1.3 4.5 3.0
unweighted average 1.5 0.9 2.8 1.8
High income countries
Korea Republic 1.2 0.7 2.0 1.1
Netherlands 3.5 2.7 7.2 5.5
Norway 4.2 3.2 7.4 5.7
Spain 2.0 1.5 3.4 2.6
unweighted average 2.7 2.0 5.0 3.7
Total unweighted
average 1.9 1.3 3.5 2.4
Source: Global Entrepreneurship Monitor 2008
Respondents were also asked whether the organization
5
they were
working for employed fewer than 10, between 10 and 250, or more than 250
employees. In this way we can trace whether in addition to the relatively high
share of adults employed in multiperson organizations in high income countries,
the nature of the employment within the medium- and large organization size
segments is also different between high and low income countries. Table 3
presents the intrapreneurship prevalence rates according to our narrow definition.
Apparently intrapreneurs are present in organizations within all size classes. For
high income countries it appears that the size class of the firm does not
differentiate the intrapreneurship rates: the rate equals about 3% for all three size
5
These organizations include private businesses as well as organizations in the (semi-)public
sector. Self-employed have not been asked this question. We made the assumption that these
persons are active in the small business sector.
14
classes.
6
Only in the Netherlands we found a significant deviation: intrapreneurs
in the Netherlands are more often found in small firms (7.2% versus 3.5% and
3.3% in respectively medium- and large-sized firms). In low income countries
intrapreneurship seems to be underrepresented in medium-sized businesses and
relatively prominent in (the very small number of) large organizations.
Table 3 Prevalence of intrapreneurship (narrow definition) across firm size classes
< 10
employees
10 - 249
employees
> 250
employees
Total
Low income countries 1.1 2.1 3.4 1.8
High income countries 2.2 2.7 3.0 2.6
All countries 1.4 2.5 3.2 2.2
Source: Global Entrepreneurship Monitor 2008
Figure 2 Intrapreneurship rates (narrow definition, percentage of employed) by country group,
age and gender
Figure 2 presents the prevalence of intrapreneurship by age category and gender, for
low and high income countries. The relatively low number of intrapreneurs in the 18-
24 years group in high income countries may be related to longer education careers in
high income countries causing a differential effect on the composition of the
6
Organizations (private and public) with more than 250 employees are more prevalent in high
income countries than in low income countries. The relatively low percentage of
intrapreneurship in large organizations in high income countries might be explained by the
dominance of public sector organizations in this size segment.
0
1
2
3
4
18-24
years
25-34
years
35-44
years
45-54
years
55-64
years
male female
age categories gender
Low income countries High income countries
P
r
e
v
a
l
e
n
c
e
r
a
t
e
o
f
i
n
t
r
a
p
r
e
n
e
u
r
s
h
i
p
(
n
a
r
r
o
w
d
e
f
i
n
i
t
i
o
n
)
15
employed in this age group. There seems to be less of a gender bias in
intrapreneurship in low income countries than in high income countries.
5. The nature of intrapreneurship
5.1 Intrapreneurship in practice
In this section we explore some key characteristics of intrapreneurship. Table 4
presents the results with respect to the most significant new business activity in
which intrapreneurs, as defined according to our narrow definition, have been
involved during the past two years. In the first column it is shown that more
often than not, these intrapreneurs became involved in developing the new
business idea, acting on their own initiative rather than because they were asked
to do so by their manager or another colleague. The incidence of own initiative
seems to be somewhat higher in high income countries than in low income
countries. This suggests that the relatively low levels of autonomy in low income
countries affect both the prevalence and nature of intrapreneurship in these
countries.
The second column shows that, on average, about 50% of all intrapreneurs have
had to overcome some kind of internal resistance in developing the new business
activity. This element deserves further scrutiny in a future study.
In addition, risk taking is a well-known core characteristic of entrepreneurship.
From the third column it appears that, on average across the eleven participating
countries, about one-third of intrapreneurs report having taken personal risks in
becoming involved in the new business activity. However, the incidence of
personal risk taking appears to be much lower in high income countries than in
low income countries. This suggests that intrapreneurship is a much more
daunting activity in low income countries than in high income countries. To
examine this in somewhat more detail, four types of risk were identified: loss of
status, damage to career, loss of job and loss of own money invested in new
activity. It appears that personal risk most often relates to the possible loss of
own money that is invested in the new activity, for both country groups. Loss of
status was mentioned more often in high income countries, whereas loss of job
was mentioned more often in low income countries.
Finally, it was found that about half of the intrapreneurs developed new business
activities involving a product or service that was new to the intrapreneur's
organization. The innovativeness of these activities does not clearly differ
between high and low income countries. Both categories include countries with
relatively many innovative intrapreneurs: Chile and Latvia in the low income
group (both 71%), and Norway (65%) and the Netherlands (58%) in the high
income group. Information about newness to customers and newness for the
industry is available for both intrapreneurs and early-stage entrepreneurs. In high
income countries, 13% of the early-stage entrepreneurs believe that their product
is new to all customers, while this holds for 26% of the intrapreneurs. Both
figures are somewhat higher in low income countries. However, the
intrapreneurs and early-stage entrepreneurs in high income countries perceive
similar degrees of newness for the industry: 7% of the intrapreneurs, against
16
10% for the early-stage entrepreneurs, see no existing competitors for their
product. These figures are not very different in low income countries.
Table 4 Some characteristics of intrapreneurship (narrow definition) in eleven countries,
2008, as percentage of the total number of intrapreneurs
% own
initiative
%
overcoming
internal
resistance
% taking any
risks
personally
% new
product or
service
Low income countries
Peru 71 71 71 50
Brazil 36 45 27 45
Chile 39 25 66 71
Iran 50 53 86 71
Latvia 57 57 43 71
Ecuador 25 75 67 33
Uruguay 40 50 40 40
unweighted average 45 53 53 52
High income countries
Netherlands 60 56 30 58
Spain 73 40 18 28
Norway 48 48 28 65
Korea Republic 50 50 25 N/A
unweighted average 58 49 25 38
Total unweighted
average 50 51 42 46
Source: Global Entrepreneurship Monitor 2008
Table 5 presents the job growth expectations for new business activities by
intrapreneurs, nascent entrepreneurs and owner-managers of young firms, by country
group. Intrapreneurs have clearly higher job growth expectations than independent
entrepreneurs, suggesting higher aspiration levels of intrapreneurs and/or better access
to resources for achieving growth. Both intrapreneurs and independent entrepreneurs
have higher job growth expectations in low income countries than their counterparts
in high income countries.
17
Table 5 Distribution of job growth expectation of intrapreneurs, nascent entrepreneurs and
owner-managers of young firms, by country group, 2008
up to 1
employee 2-5 employees
6-19
employees
>20
employees
Low income countries
intrapreneurs 2 21 27 50
nascent entrepreneurs 13 49 26 12
baby business owners 30 38 20 12
High income countries
intrapreneurs 12 24 33 31
nascent entrepreneurs 32 33 20 15
baby business owners 37 37 16 11
5.2 Some examples of 'new business activities'
To get an idea of the business activities the intrapreneurs are actually involved in, an
open ended question was phrased. Here the intrapreneurs were asked to briefly
describe the most significant new business activity in which they had been actively
involved in the past two years. Table 6 displays the responses from the Dutch sample
and has been categorised into activities involving (i) new products and services; (ii)
new markets, outlets, or establishments; and (iii) new production processes.
The large majority of new business activities in this sample are oriented towards the
market, by introducing new products and services, by entering new markets or by
establishing new outlets or establishments. Most of these activities fit best under the
heading of 'new entry', as discussed in a previous section, while a fair number belong
to the domain of 'new organization creation'. Just below 25% of the new business
activities in the Dutch sample have to do with developing and/or introducing new
production processes. It would require a more in-depth investigation to find out to
what extent these latter activities truly represent 'pursuit of entrepreneurial
opportunity' or rather are examples of 'innovative work behaviour'
7
. A final
observation is that a number of new business activities in the Dutch sample are in the
area of education, health care or social services. In sofar as some of these activities
may possibly be 'not-for-profit', these may also be viewed as examples of 'social
intrapreneurship'.
7
For a discussion of differences and similarities of intrapreneurship and innovative work
behaviour, see De Jong and Wennekers (2008).
18
Table 6 Categorization of new business activities mentioned by Dutch intrapreneurs, 2008
New products and services New markets, outlets, establishments New production
processes
Consultancy, business to business,
business take-overs
To merge two independent institutions. Digital printing
To set up training program,
exercise program, for people with
lung disorders.
Company for leasing and financing
cars.
To be able to train
students on the job.
Introduction of new products.
Making/producing and importing
products. We are expanding to Asia.
Innovations in
education.
Training and communication
services.
To set up new offices abroad.
I am outsourcing
activities.
Expanding services. Started a cooperation with another firm
Starting a production
line.
Started a new training. Investment company
To get more money by
creative thinking.
Starting a new department for
assurance products/services.
Foundation of Good Ideas: to give a
chance to ideas that are difficult to
develop.
R&D
To develop and promote a new,
state subsidized scheme.
We build satellites of our own company
all over the country: a kind of "Shop in
shop" concept.
To introduce a new and
faster internet
connection.
Manager in a dolphin house,
thinking up and promoting new
shows with animals, new
animation programs for children.
Taken over companies
New automated ticket
selling system.
Positioning business intelligence
by means of the newest Microsoft
technologies.
Starting a new company in Romania.
Importing more from
China and Japan.
To introduce a new insurance
product for private persons.
Telemarketing.
Development of
maintenance plan.
Expand the present company with
consultancy on privatization of
public services.
Marketing, developing products,
promotion and selling a sales channel
for barbecues.
New
stockroom/warehouse.
To launch a new product
Finding a new market for existing
products, optical products.
To start/introduce a new product
in our branch, thermal printer
heads.
Starting a new sports centre.
Social and domestic services
To seek a market, to seek partners, to
maintain/keep accounts.
To give workshops.
Setting up an office abroad, part of a
university.
Agency to support clients with physical
defects
To start a clinic for people with mental
defects and psychiatric problems.
To organize distribution in China
Starting a new company selling
products on the internet.
Starting new sites and establishments.
Starting a new establishment.
To start new establishments.
Business for welfare/social work.
Source: Global Entrepreneurship Monitor 2008
Note: out of 63 responses, six could not be coded into either of these categories, while five were
unable or not willing to provide a description
19
6. Attributes of individual intrapreneurs
In Table 7 we have studied the attributes of individual intrapreneurs, across all
countries, for low and high income countries separately. Intrapreneurship seems
to be a suitable springboard to independent entrepreneurship, even more so in
low income countries than in high income countries. The latter observation is
especially reflected in the very high levels of perceived entrepreneurial skill
(94%) and opportunity (50%) levels of intrapreneurs, even higher than the
already high levels in the overall employed population in low income countries.
Table 7 Relationship between intrapreneurship and entrepreneurial perceptions at individual
level, 2008
Low income countries High income countries
% of
intrapreneurs
% of other
employees
% of
intrapreneurs
% of other
employees
You personally know an
entrepreneur who recently
started a business
59 46 54 33
You have the required skills
and knowledge to start a firm
94 60 62 44
There are good opportunities
for starting a business in the
area where you live
50 35 33 25
Fear of failure would not
prevent you from starting a
business
76 65 65 56
Source: Global Entrepreneurship Monitor 2008
Note: numbers in italics denote significant differences between intrapreneurs and other
employed (p