gem_worldbank 16-12-23

Europe’s Hidden Entrepreneurs Make Up for Continent’s Low Start-Up Rate

Europe has long had the paradoxical reputation of a continent with low levels of entrepreneurship, yet high overall levels of economic competitiveness. A new report produced by the World Economic Forum and the Global Entrepreneurship Monitor provides an explanation: Europe is home to many intrapreneurs, individuals who choose to innovate within organizations.

The findings are important for future potential growth in Europe, as those who innovate within organizations tend to create more jobs than those who start their own business. A correlation also exists between intrapreneurship rates and economic competitiveness: every 2.5 percent increase in a country’s intrapreneurship rate correlates to a 1 point increase in competitiveness as measured by the World Economic Forum’s global competitiveness data.

Sweden is Europe’s most intrapreneurial country

The European results vary widely, and are worst in its industrial heartland. The UK, one of Europe’s strongest economies, is the exception among large countries, coming in 5th overall and 3rd in intrapreneurship. But Germany (24th) and France (25th) appear at the bottom of the combined ranking, despite a moderate score in intrapreneurship. The three worst ranking countries overall are Greece (26th), Spain (27th) and Italy (28th). It is a worrying sign as Europe’s competitiveness depends on that of its heartland. Estonia, Sweden and Latvia come out on top. Other Northern countries also score well for the combined ranking of entrepreneurship and intrapreneurship, bringing up the continent’s total score.

The report explains the implications for policy makers, and ways they can design policies to enhance the economic competitiveness and unleash all types of entrepreneurship. The choice is not between start-ups and intrapreneurship as economies flourish when all types of entrepreneurship exist at healthy levels.

“Intrapreneurship has been a key factor in strengthening the competitiveness of Swedish corporations”, comments Pontus Braunerhjelm, Professor Royal Institute of Technology and Research Director Swedish Entrepreneurship Forum “Focus, in policy, should be on creating a business climate that stimulates creativity and the diffusion of knowledge, regardless of whether this takes the form of entrepreneurship or intrapreneurship. This includes facilitating individuals moving between employment and self-employment, reducing the regulatory burden and increasing the focus on raising the knowledge level of our students. In the end, intrapreneurship is a way of providing the business sector with highly competent employees”.

Read the full report