Mar 122018
 

Felipe Jánica: “Digital component is a must, not an option”

EADA's International Week 2018 analyzes the concept of innovation related to corporate entrepreneurship.

EADA’s International Week 2018 examines in detail the concept of innovation related to corporate entrepreneurship.

EADA’s International Week 2018 analyzes from today until Friday 16th March the effect of innovative entrepreneurship on the sustainability and perdurability of the business. This seminar, conducted by Ernst & Young global partner Felipe Jánica, aims to understand the conceptual framework of innovation and corporate entrepreneurship. The point is how global businesses and regulatory entities around the world could work together for the prevention of business failures and for driving long-term sustainable growth.

In your opinion, what is the difference between innovative and corporate entrepreneurship?
As cited in Goswami & Mathew, innovation is the degree to which changes are intentionally implemented that is new to the organization. An example of this is when companies are fully committed to doing something different in order to get a better outcome. Innovative entrepreneurship relates to how the entrepreneurs develop a new idea different than those that already exist in the market. On the other hand, corporate entrepreneurship refers to the process of creating new business within established firms to improve organizational profitability and enhance a company´s competitive position or the strategic renewal of existing business (Zahra, 1991, p.260-261). Corporate entrepreneurship relates to new activities that can be a new business other than its core one.

What is the impact of innovative and corporate entrepreneurship on companies?
The impact of innovative and corporate entrepreneurship is that without it companies will be ready to fail. The absence of focus on corporate entrepreneurship is positively associated with business failure. I can argue in a different way by saying that the presence of the focus on corporate entrepreneurship is negatively associated with business failure.

What are your recommendations to prevent business failures?
Although there are sufficient academic examples related to corporate entrepreneurship (CE) and business failure (BF), there is no conceptual framework based on the effect of CE for the avoidance, prevention or even prediction of BF and for driving of long-term sustainable growth, both economically speaking and in terms of the ecosystem. With the goal of understanding the underpinnings of business sustainability in the long-term, it is necessary to understand why they fail. The framework I propose would contribute to this understanding by addressing the effect of CE, which encompasses innovation (I) and diversification in products and services driven by strategic renewal (SR), on business failure. At the same time, this conceptual framework would help understand the root cause of BF.

What role does innovative entrepreneurship play in the future?
Innovative entrepreneurship will be crucial for new ways of doing business, not only in the local arena but in the global one. Putting the shoes of the clients and listen what the trend of the markets says will be the raw material for the entrepreneurs of the future. Digital component is a must, not an option.

The seminar is conducted by Felipe Jánica, global partner of Ernst & Young. He is the market drgment leader of the Bogotá office in Colombia and he also leads the Financial Accounting Advisory Services in Latam.

The seminar is conducted by Felipe Jánica, a global partner of Ernst & Young. He is the market segment leader of the Bogotá office in Colombia and he also leads the Financial Accounting Advisory Services in Latam.

Being global partner at EY, what has been your biggest challenge in the last years and how did you overcome this?
My clients and the business communities are a wheel. Movement is not equal to progress. Thus, I have been seeing how some companies move and how other progress. My biggest challenges are related to both kinds of companies. For those that move, my challenge is to persuade them to progress. For those that progress, the challenge is to understand and learn (sometimes re-learned) how they do it.

What about the innovative entrepreneurship in Latin America? And what about it compared to the USA and Europe?
There are many differences. In my study, I found that there are intervenient variables such as the size of the companies and the industry. In Latin America, there is a lot of small and medium-size entities. Thus the absence of a budget and human capital is a challenge for companies that want to be global. Latam companies are more responsive to changes rather than being proactively embracing future change. Nevertheless, there are good exceptions to this inference. High tech is a good comparison on how companies in developed markets progress than in emerging markets. The absence of support from governments is being the “softball” for those Latam companies.

Tell us about your opinion on long-term sustainable growth, both economically and in terms of the ecosystem.
Understanding the role of corporate entrepreneurship (CE), Innovation (I) and diversification in products and services driven by strategic renewal (SR) could help stakeholders to find new ways to prevent business failure (BF). Determining the right moment to implement CE activities (intervention point) would be crucial for the administrators and the regulators in order for them to prevent BF or even bankruptcy. Hence, my proposition on developing a conceptual framework that considers CE activities could be a point of reference for practitioners, academics and regulators. They all may develop more studies, models and/or methodologist to avoid, prevent or even predict BF, in order to reduce the overall number of bankruptcies and improve business performance in companies.

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