Is There Entrepreneurship Within the Public Sector?: A Literature Review

Is There Entrepreneurship Within the Public Sector?: A Literature Review

Raquel Pereira (Polytechnic of Porto, Portugal), Maria Clara Ribeiro (Polytechnic of Porto, Portugal), Orlando Manuel Martins Marques Lima Rua (Polytechnic of Porto, Portugal) and Diana Martins (Catholic University of Porto, Portugal)
DOI: 10.4018/978-1-5225-6942-8.ch005

Abstract

Because of its importance as a key factor to economic development, the study of entrepreneurship has been considerably developed in the past decades. Entrepreneurship is broadly diversified, which is associated with, for example, studies in the field of business, social, female, and young entrepreneurship. If, on the one hand, it is a fact that entrepreneurship and its study are mainly associated with the private initiative, there is, on the other hand, a question to be asked: Is there entrepreneurship in the public sector? Though still incipient, the study of entrepreneurship applied to the public sector and the acts of the public managers as entrepreneurs have revealed themselves to be themes with increasing interest. To contribute to a better conceptual understanding of this theme, namely its questions, ideas, and current debate, this work presents some theoretical reflexions and a relevant literature review on entrepreneurship in a public sector context.
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Introduction

The theme of entrepreneurship, as a field of research and investigation, has seen, in the last decades, a remarkable growth in its study and application. There has been considerable interest in the contribution of entrepreneurship to economic development (Stought, 2016). Entrepreneurship (and the activity of entrepreneuring) are key factors for economic growth and development insofar as they are considered sources of innovation and thus contribute to increased productivity and efficiency (Acs & Szerb, 2007; Stephens, Partridge & Faggian, 2013; Trettin & Welter, 2013).

While the literature that addresses the theme of entrepreneurship in the context of the private sector is vast, with regard to its application to the public sector, and to the performance of public managers as entrepreneurs, literature is still scarce, although it is a subject of growing interest (Diefenbach, 2011; Klein, Mahoney & McGahan, 2010; Matthews, 2014; Zampetakis & Moustakis, 2007; Zerbinatia & Souitarisb, 2007).

Considering the challenges faced by today's societies, which inevitably require a creative response / approach from national, regional and local governments, several researchers recognize the need for more research on this subject in order to better understand the relevance entrepreneurship (and entrepreneurial activity) in the context of the public sector and its organizations.

Thus, the main goal of this work is to discuss the concept, raise theoretical reflections and review the literature on entrepreneurship (intrapreneurship) in the context of the public sector, in order to contribute to a better conceptual understanding of this theme, namely its issues, ideas and current debate. We begin, in section I, by reviewing the concept of entrepreneurship and its application in the context of the public sector. Next, and in order to have a perception of the “state of the art”, we present a literature review, namely, the main contributions of literature specifically applied to local / regional public (political) entrepreneurship. Finally, we present some final considerations.

Key Terms in this Chapter

Entrepreneurship: Entrepreneurship is the process by which individuals—individually or within an organization—want to develop, implement, organize, and manage a new business (or changes in existing companies) with all the risks implied, in order to create economic value and make a profit.

Economic Development: Is a dynamic long-term phenomenon that reflects the changes that are taking place in the economic, social, political, and cultural structures in an economic system. The economic development concept integrates the idea of economic growth, the increase of the production, and consumption opportunities, but it goes beyond this, considering that it is a process that implies the improvement in living standards, namely, better jobs, reduction in inequality income distribution, greater and better access to education and health, and improve of environmental protection.

Entrepreneurial Ecosystem: Is a system composed of a range of stakeholders, public and private, individual and collective, as well as the full set of policy measures defined and adopted to enhance their action, articulation, and co-development, in order to promote entrepreneurship, value creation, and economic development. Approaches to define entrepreneurial ecosystems usually consider some key dimensions: high human capital qualification, open markets, favourable culture, consistent financial system, governance and policy measures, institutional and business support.

Public Sector Entrepreneurship: Encompasses the whole set of measures adopted and developed by local, regional, and national authorities to support self-employed entrepreneurs to start their own businesses but also to give them support through the developed networks. Additionally, it encompasses all the innovative ways of action and acting of public powers and their agents that promote economic growth, collaboration with the market, and the citizens as to encourage sustainable development.

Intra-Entrepreneurship: Is the practice of developing a new project within an existing organization, carried out by the employees or managers, to explore a new opportunity and create economic value.

Public Sector: Includes the areas of a country's economy which are controlled by the state. In most of the countries, the public sector comprises the national, regional, and local governmental authorities, including the policy measures defined and adopted by those authorities, in order to provide public services (e.g., public infrastructures, public education, and health care) to citizens without seeking to generate profit. The public ownership firms, which provide services and goods for sale, and usually operate on a commercial basis (seeking profit), are not included in public sector.

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