Dutch companies fail to provide fertile ground for innovation Erasmus Entrepreneurship Index 2014
Conditions conducive to innovation are often absent in Dutch companies – according to the Erasmus Entrepreneurship Index 2014, an annual study into entrepreneurship carried out under the leadership of Prof. Justin Jansen of Rotterdam School of Management, Erasmus University (RSM) who worked with the Erasmus Centre for Entrepreneurship (ECE). The study’s most important results were presented Tuesday September 11 at the annual ECE congress in the Rotterdam Science Tower.
According to the Erasmus Entrepreneurship Index, many Dutch companies lack an entrepreneurial spirit. Justin Jansen finds this particularly alarming: “It indicates there’s no fertile ground for future improvements in innovation performance and corporate results,” he said.
No fewer than 40 per cent of Dutch companies earned unsatisfactory marks for entrepreneurship, and the study shows they also do badly when it comes to being willing to take risks and take on challenging projects, as well as in having a proactive attitude towards their workforce. In particular, construction and manufacturing industries and the service sector do not show enough interest in developing entrepreneurship.
Despite entrepreneurship topping the socioeconomic agenda, it seems that the Dutch business world doesn’t have enough ambition. There are a large number of start-up businesses every year, but further growth is hampered by a lack of ambition and lack of the long-term vision required to continually find new markets and launch products. Professor of Corporate Entrepreneurship Justin Jansen foresees stagnation unless swift action is taken and managers adopt a new mindset.
A growing gap between winners and losers
Entrepreneurship within companies turns out to be one of the most crucial factors that sets successful companies apart from their less successful competitors. The Erasmus Entrepreneurship Index 2014 demonstrates that entrepreneurial companies achieve up to 75 per cent more growth in the number of new products and services developed. In addition, productivity within these companies is 34 per cent higher. “That’s a highly interesting outcome, showing that entrepreneurship does not get in the way of productivity,” says Prof. Jansen. “As a matter of fact, giving more responsibility to employees and promoting a more entrepreneurial attitude and greater participation in the decision-making process make for smarter implementation of activities. What’s more, it speeds up the growth of sales and market share,” he says.
“If you compare the findings of this year’s report with those of last year, you can also see that the effects of entrepreneurship have more than doubled. The outcomes indicate that many entrepreneurs are now facing a very challenging choice to determine the future of their companies. Either they can fundamentally overhaul their organisations to boost entrepreneurship and sustainably improve their results, or they can continue to muddle through.”
Fundamental changes in Dutch companies are necessary
The Erasmus Entrepreneurship Index 2014 also highlights that many companies are still being managed in a traditional fashion: employees with the same experience background and hierarchy in working relationships and formal management of the innovation process.
If Dutch companies are serious about entrepreneurship, the adoption of other organisational principles is crucial: greater diversity within companies, far-reaching autonomy for workers, the introduction of self-managing teams, as well as the management of innovation projects on the basis of fast feedback and a steep learning curve. Jansen says: “The extent to which entrepreneurship is embraced and supported strongly depends on the company’s management team. It needs to have the guts to develop a progressive vision and hand power and influence over to staff. The management team must improve the way it deals with uncertainty and show real confidence in its workforce. Without managers fundamentally changing the way they think, entrepreneurship will not get off the ground.”
Each year, the Erasmus Entrepreneurship Index monitor surveys entrepreneurship among around 6,000 Dutch companies active in a wide range of economic sectors.
Rotterdam School of Management, Erasmus University (RSM) is ranked among Europe’s top 10 business schools for education and among the top three for research. RSM provides ground-breaking research and education furthering excellence in all aspects of management and is based in the international port city of Rotterdam - a vital nexus of business, logistics and trade. RSM’s primary focus is on developing business leaders with international careers who carry their innovative mindset into a sustainable future thanks to a first-class range of bachelor, master, MBA, PhD and executive programmes. RSM also has offices in the Amsterdam Zuidas business district and in Taipei, Taiwan. www.rsm.nl
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