Problem:

Entrepreneurialism is a critical driver of innovation, competitiveness, and sustainable growth in small and medium-sized enterprises (SMEs). Beyond new venture creation, entrepreneurialism in SMEs refers to the ability of organisations and employees to recognise opportunities, experiment with new ideas, and create value through innovation and continuous improvement. Evidence from the GETM project shows that entrepreneurialism is most effectively fostered through job design, talent management, leadership practices, and organisational culture, rather than through isolated initiatives. The following key factors summarise the main conditions that enhance entrepreneurialism in SMEs.

Key insights:

Based on GETM4 research, key factors that enhance entrepreneurialism in SMEs are the following:

• Entrepreneurial mindset and culture: Entrepreneurialism is strengthened when proactive thinking, creativity, and opportunity recognition are encouraged across all roles, not only among founders or managers.
• Autonomy and discretion at work: Granting employees autonomy in organising tasks and making decisions enables initiative-taking, ownership, and entrepreneurial behaviour.
• Job design that supports variety and challenges: Roles that include task variety, responsibility, and problem-solving opportunities stimulate learning, creativity, and innovation.
• Support for intrapreneurship: Allowing employees to develop and implement new ideas internally helps SMEs innovate while retaining entrepreneurial talent.
• Leadership support and role modelling: Entrepreneurialism grows when leaders actively support experimentation, tolerate failure as part of learning, and visibly endorse innovative ideas.
• Risk- and failure-tolerant environments: Treating failure as a learning opportunity rather than a setback reduces fear and encourages experimentation.
• Continuous learning and skill development: Learning opportunities and knowledge sharing enable employees to adapt to change and apply new ideas in practice.
• Collaborative teamwork and knowledge exchange: Diverse teams and collaboration support idea generation, learning, and implementation of innovative solutions.
• Recognition and rewards for entrepreneurial behavior: Acknowledging initiative and creativity reinforces entrepreneurial actions and signals organisational commitment.
• External openness and ecosystem engagement: Collaboration with customers, partners, and innovation ecosystems helps SMEs overcome resource constraints and access new capabilities.

Actions:

Entrepreneurialism in SMEs is best supported through integrated approaches that align job design, talent management, leadership, and culture. Policy and support measures should prioritise flexibility, autonomy, learning, and leadership engagement to create enabling conditions for everyday entrepreneurial behaviour. A more detailed look at each of the factors enhancing entrepreneurialism in SMEs is in separate documents. For a complete look consult the full Guidelines on capturing entrepreneurialism through job design and talent management.