The 2014 Global Award for Entrepreneurship Research was dedicated to Professor Shaker Zahra on December 3 at a ceremony at the Academy of Music in Stockholm. The laureate was present along with Gustav Borg Falk, entrepreneur, Pontus Braunerhjelm, Managing Director Swedish Entrepreneurship Forum and Professor KTH, Charlotte Brogren, Director General VINNOVA and Melker Schörling, Chairman Melker Schörling AB. Moderator at the crowded ceremony was Pernilla Ström, economist, journalist and professional board member.
Pontus Braunerhjelm opened the ceremony, talking about the price. Since its inception in 1996 the Global Award for Entrepreneurship Research has become firmly established as the foremost global award for research on entrepreneurship. This Prize is awarded annually and it consists of the statuette “The Hand of God”, created by Swedish Sculptor Carl Milles, and a Prize sum of 100 000 euros. Partners behind the award is Swedish Entrepreneurship Forum, Institute of Industrial Economics (IFN), VINNOVA and Melker Schörling.
Why Global Award for Entrepreneurship Research?
Pernilla Ström, moderator, said that she looked forward to interesting discussions during the afternoon and left the word on to the Melker Schörling. He told the audience why he has chosen to support the Global Award for Entrepreneurship Research, accentuating that business and entrepreneurship and research on this subject is important to maintain a working population.
– I have lived long enough to remember when entrepreneurship was associated with something bad. So it is no longer, let’s keep it like this.
Charlotte Brogren, Director General VINNOVA, presented VINNOVA’s mission as the Swedish innovation agency serving to strengthen innovation in Sweden. She said that without research and insight into research in innovation, they would not be able to do their work.
– We must base our knowledge on research.
Motivation for this year’s prize
Pontus Braunerhjelm then read the motivation for this year’s winners, Professor Shaker Zahra, who does research in Corporate Entrepreneurship and the ability to develop innovations using the resources they have.
“Professor Shaker Zahra has accumulated an impressive record of exceptional scholarship, consisting of theoretical, empirical as well as institutional contributions. His research has been remarkably diverse, spanning three main areas and literatures within management and strategy: corporate entrepreneurship, international entrepreneurship, and social entrepreneurship. He is best known for his work on the role of corporate entrepreneurship in knowledge creation, absorption, and conversion. However, Professor Zahra’s impact has been considerably broader and extends beyond these research areas, and even beyond the broader fields of management and strategy. His research has been recognized by and had an impact on a broad spectrum of scholars spanning a wide range of fields and disciplines throughout the social sciences. His research has been done in an international context, with applications throughout the world. Professor Zahra has served on over 25 journal editorial boards and has leading roles in many organizations devoted to entrepreneurial scholarship. His impact on the scientific community eminently qualifies Professor Zahra for the Global Award for Entrepreneurship Research.”
Studies in Corporate Entrepreneurhsip
Shaker Zahra, Professor Carlson School of Management at the University of Minnesota, was welcomed up on stage. He began his speech by saying that he has been much in Sweden, the first time in 1996, and that he wanted to dedicate his speech to his grandmother. Without her, he would not be where he is today.
Professor Zahra told the audience that he has been studying Corporate Entrepreneurship since the 80’s, when he analyzed how Japanese companies took over the world with new strategies. The fundamental question then was how companies could respond to global competition. The answer was that companies worked with strategic renewal and rediscovered the importance of entrepreneurship.
– Corporate Entrepreneurship is about the activities that companies use to create new business, build new skills, revitalize, stimulate growth and improve productivity, Professor Zahra explained.
According to him, this applies both within a company, through innovation, and beyond its borders, by taking risks. The companies went from protecting their markets to transform and explore the global market by developing new abilities. Professor Zahra studied leading multinational companies from around the world and noticed that internationalization, Corporate Entrepreneurship and the creation of new knowledge transformed an ongoing cycle.
– The companies took risks, they went out into new markets and found new ways to compete. Moreover spread the entrepreneurial spirit that local companies were created. New knowledge and abilities were created.
Corporate Entrepreurship to opportunity and growth
Why is it important to focus on Corporate Entrepreneurship? According to Professor Zahra it gives an insight into the opportunities created and detected in a company, it offers a platform for companies to create new markets, it is the source of profitability and growth. It is also a way to understand the origin of the organizational capacity within a company and it emphasizes the managerial role of entrepreneurs.
Professor Zahra said that Corporate Entrepreneurship creates new forms of knowledge in all areas; social, entrepreneurial, organizational, technological, market and competition. They are created by uploading and sharing of ideas, by integrating and combining knowledge by learning from failures and by so-called CE Hubs – nodes for Corporate Entrepreneurship. Interviews and observations that Professor Zahra has done on site at companies shows that many intrapreneurial activities are developed within the informal hub. These hubs are very useful for determining intrapreneurial activities such as orientation, scale, etc.
– Ideas must be created and discovered. Within the process of an idea different players play different roles in the struggle to see the ideas realized. The closer the company’s core the idea arises, the greater the chances that the management catches it.
Interconnecting knowledge sources
Professor Zahra spoke highly of the CE Hubs and its role in linking together different sources of knowledge. According to him, it requires multiple sources of knowledge, a well-developed organizational absorptive capacity. These hubs fulfill a set of features that will help the company to acquire, assimilate, transform and utilize incoming knowledge, he explained.
– There will be a flow of knowledge within the hubs that affect the speed, depth and radicalism of organizational learning.
The new forms of knowledge that Corporate Entrepreneurship creates must be integrated in various combinations to later create new processes and innovations, Professor Zahra explained. The implication of this approach is that it integrates formal and informal sources of knowledge across organizational levels. It also explains how several opportunities may arise from the same skill set. Last but not least, it shows the need to go beyond access to knowledge and absorption.
– Conversion and integration of new knowledge is crucial.
When it comes to conclusions that are policy relevant from Professor Zahra’s research, he meant that Corporate Entrepreneurship should be viewed as knowledge and learning as a source of new innovations. He stressed that it is important to build a vibrant and dynamic ecosystem to get the symbiotic relationships between new ventures and established companies. To achieve this it requires internal and external risk through for example open innovation processes:
– A company needs an engine that transforms knowledge into tangible prototypes, software and applications.
The manager’s role as an entrepreneur
Professor Zahra concluded his speech by summarizing his research in a number of short points. First and foremost, we need an approach where the manager is an entrepreneur, he explained. Corporate Entrepreneurship is a knowledge activity that contributes to the strategic renewal and growth.
– Conversion of knowledge is an important qualification for successful commercialization. Corporate Entrepreneurship acts as a positive spiral, an organizational capability that encourages the company to strategic measures, concluded Professor Zahra.
After professor Zahras speech the audience was allowed to ask their questions. Pernilla Ström wanted to know how incentives could be designed to have the best effect. Professor Zahra considered the atmosphere to be critical to create an innovative spirit.
– The best incentives have to be your environment, to be surrounded by intelligent and creative people.
Education and entrepreneurship
Bitte Slättebol asked how Professor Zahra saw the relationship between education and entrepreneurship. Professor Zahra considered entrepreneurship education almost fashionable nowadays, but could see a point in teaching the entrepreneurial way of thinking from an earlier age.
– Everyone needs to be challenged to meet the unknown.
Sweden has to to keep on developing its innovation climate
Charlotte Brogren, Director General VINNOVA, was the first commentator of the ceremony. Brogren explained that VINNOVAS’s mission is to create a better innovative climate in Sweden.
– Sweden has high levels of entrepreneurship, compared to other countries.
However, this should not be seen as an excuse to decrease efforts, Brogren said. Even if you are best in the world you still need to practice, she meant, especially in a more globalized and competitive world.
– People create innovation in small and medium-sized companies, as well as in large corporations.
VINNOVA is working on creating a better climate for these individuals so they can keep on innovating. One way of doing this is by financing projects that are not yet commercially viable. In conclusion Charlotte Brogren meant that society sometimes forgets how good large corporations can be at creating new innovations and commercializing them.
Nothing ventured, nothing gained
Gustav Borgefalk, entrepreneur, saw a smaller degree of creative outlet for people like himself employed in larger corporations. Therefore, they often choose to start their own business.
– What gets my attention with Professor Zahra’s research is the importance of the environment for entrepreneurs to grow.
Big companies are often unwilling to invest funds in ideas if they come from people at the bottom of the organization. Consequently, some people will prefer to run their own company and ask for funds from a business angel. Even companies with a well-developed infrastructure for promoting innovation are too risk-aware to invest in these ideas.
– A lack of flexibility in larger corporations causes them to miss out on good ideas.
Not taking risks might hamper these companies – nothing ventured, nothing gained – Borgefalk said as a last remark.
Larger corporations can work in an entrepreneurial way
Klas Granström, Editor in Chief digital media Expressen, meant that larger corporations also could work in an entrepreneurial way. Printed media faces great challenges at the same time as digital media stands in front of great opportunities.
– The past few years Expressen have run the digital side of the newspaper in an entrepreneurial way.
The newspaper used to miss out on new ideas since they did not fit into the old way of doing things. This has been changed through new management and reorganization.
– Even long-time employed journalists have changed their way of working. A must if they want to reach people with their texts, Granström said.
Innovation important to protect Sweden’s competitiveness
As the award ceremony of Global Award for Entrepreneurship Research 2014 came to an end, the participants gathered on stage for a panel discussion. There is a misconception that larger corporations only improve a little on existing technologies, Broberg said.
– Big companies cannot stay competitive if they are not good a creating innovations.
A lot of large corporations are good at this, Professor Zahra said. Some of the larger fashion houses have stayed ahead for 200 years. They hire economists, market analysts and listen to their customers, he said. There is an importance in listening to your customers, but it depends on which business you are in, Braunerhjelm replied.
– Had Henry Ford listened to his customers, he would have made horses faster, not invented a new way of producing cars, Braunerhjelm said.
Incentive for Corporate Entrepreneurship
Incentive outside companies is of key importance, Braunerhjelm continued. He meant that the pool of possible entrepreneurs needs to be encouraged to realize their idea, one way of doing this is through option schemes. In conclusion, Braunerhjelm considered good innovative environments – where ideas can be tested – crucial to achieve this.
Another question from the audience was about how management should work to encourage innovation. What kind of personality a good manager should have is hard to accurately pin point, professor Zahra said.
– Nevertheless, both emotional and social intelligence is required to make a successful entrepreneur.
Diversity in management
Staff who reflects the market they serve is of key importance, Borgefalk thought. Moreover, he found diversity in management important to ensure diversity in ideas.
– Five years ago management within media was specialists in their field. Now, specialists work on the floor doing what they do best while management consists of generalists who revise overlaying strategies, Granström said.
As a manager concerned with innovation it is all about being paranoid about the future, Brogren established.
Pontus Braunerhjelm concluded the prize ceremony of Global Award for Entrepreneurship Research 2014 by summarizing the discussions that had taken place during the day. Entrepreneurs, SME:s as well as multinational corporations all have a role to play in creating innovations which will power the economical motor, he said at last.