Measuring Intrapreneurship

Intrapreneurship, or the process of an individual (or team) starting a business (or business line) for an existing employer, is a concept not often measured within existing entrepreneurship metrics. This makes sense since it is more difficult for government statisticians to capture intra-firm dynamics in a meaningful way, industrial organization scholars are more focused on the behavior of the firm (not the entrepreneurs running them or employees of them), and entrepreneurship scholars, for the large part, are focused on owner-operator firms with little systematic tracking of other key employee actions.

All of this makes noteworthy a recent report out from the Global Entrepreneurship Monitor (GEM) team of scholars looking at the topic of intrapreneurship. Intrapreneurship is a concept that GEM has measured for some time in their screener at the national level but this new effort to conceptualize and inquire at the household level in Brazil, Chile, Ecuador, Iran, Republic of Korea, Latvia, the Netherlands, Norway, Peru, Spain, and Uruguay stands out for going into greater depth than previous work. Specifically, the scholars have screened for intrapreneurship using the following logic process.

If each implementing national team has implemented these concepts with strict adherence to protocol and is working with a quality survey vendor, then I think this was a really helpful exercise. First, the questions and logic are simple and straight forward. Second, capturing intrapreneurship should be a strength of household survey frames, which GEM uses. And, lastly, the scholars attempt to differentiate across different levels of intrapreneurship, although there are still broader conceptions of intrapreneurship that have been employed by others.

The authors come to the conclusion 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," but probably more importantly to me is their finding that "the prevalence of intrapreneurship is about twice as high in high income countries as in low income countries." This makes a lot of sense since higher-income countries tend to have larger business organizations and thus the likelihood that a working age individual is employed at large business organization increases as countries develop. But on a related topic, I am puzzled by their finding that the prevalence of intrapreneurs increases with the size of the business.

If this is an unweighted measure, as I think is the case, then I worry this will lead to the conclusion that employees at smaller companies are less "intrapreneurial" but in fact, I suspect that if you weighted this so that it was on a per employee basis then the resulting outcome would be much more balanced. 

Additionally, I wanted to point out the similarities of some concepts being measured here and those which are measured in other survey frameworks looking at innovation. Specifically, this survey protocol and the Oslo Manual, which the Organisation for Economic Co-operation and Development (OECD) uses to measure innovation at the firm level, both appear to look at whether the new business activity involves a new product or service. There is a lot of potential overlap in concepts between entrepreneurship and innovation so this isn't surprising but should be noted.

Read the full report, Intrapreneurship - an international study.

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e.j. reedy data maven

E. J. Reedy

As a director in Research and Policy, E.J. Reedy oversees the Ewing Marion Kauffman Foundation’s research initiatives related to education, human capital development, and data.

Since joining the Kauffman Foundation in 2003, Reedy has been significantly involved in the coordination of the Foundation’s entrepreneurship and innovation data-related initiatives, including the Kauffman Firm Survey, for which he served as a principal investigator, and the Foundation’s multi-year series of symposiums on data, as well as many web-related projects and initiatives. He is a globally recognized expert in entrepreneurship and innovation measurement and has consulted for a variety of agencies.