Fostering innovation and corporate entrepreneurship in development finance institutions

Abstract

PURPOSE: To determine how innovation and corporate entrepreneurship can be fostered in Development Finance Institutions (DFI) by means of an innovation and corporate entrepreneurship training programme. PROBLEM INVESTIGATED: Development finance institutions are regarded as catalysts for development that needs to address both the market and public failure that results from underdevelopment. There is a need for an improved understanding of what the current state of entrepreneurial orientation is within the DFI's as catalyst of development. An investigation into how innovation and corporate entrepreneurship in development finance institutions can be fostered needs to be investigated. DESIGN/METHODOLOGY/APPROACH: This research is designed as a formal case study. To demonstrate that innovation and corporate entrepreneurship can be fostered in development finance institutions the study employed a pre-test-post-test control group true experimental design in which the innovation and corporate entrepreneurship climate was diagnosed. A comprehensive ICEAI (Innovation and Corporate Entrepreneurship Assessment Instrument, based on the Corporate Entrepreneurship Assessment Instrument of Kuratko, Hornsby & Montagno 1999) was developed to measure the level of innovation and corporate entrepreneurship in a development finance institution. FINDINGS: The results of the experiment indicate that the ICEAI can be a useful tool in diagnosing the innovation and corporate entrepreneurship environment in development finance institutions; that after the training intervention of the leadership group in the experimental development finance institution, there was a notable increase in developed and approved new venture plans, indicating the organisational leaders can be change agents in innovation and corporate entrepreneurship. VALUE OF RESEARCH: The study offers empirically tested ideas on how to foster corporate entrepreneurship, innovation and new venture creation within DFIs in order to find new solutions for the challenges of underdevelopment.