Entrepreneurship from Within: Lessons for Latin America

When an established company launches a new product line, enters a new market, or creates a unit to explore new businesses, it is putting corporate entrepreneurship into practice. In recent years, this form of “internal entrepreneurship” has positioned itself as a key lever of competitiveness across markets, consistently associated with stronger firm performance.

However, in emerging economies such as those in Latin America, innovation stemming from these entrepreneurial activities may not be sufficient on its own, as shown in research conducted with Andreu Turró and David Urbano (Universitat Autònoma de Barcelona). Our study, published in the Journal of Entrepreneurship in Emerging Economies (2025), confirms that corporate entrepreneurship improves organizational performance, but its impact is conditioned by the context in which firms operate.

In emerging economies, the “rules of the game” are rarely homogeneous or stable. They are often characterized by institutional weaknesses, frequent regulatory changes, resource constraints, and volatile market conditions. In this environment, success depends on the ability to effectively navigate the institutional system.

The stronger role of informal institutions

Based on surveys of 326 executives from Colombian firms, our study shows that both formal institutions (regulation, public policy, financing) and informal institutions (social norms, culture, trust-based networks) positively influence performance. However, in the Colombian case, informal institutions carry slightly greater weight. This suggests that in many Latin American markets, trust, reputation, and informal networks remain strategic assets that help compensate for weaknesses in the formal framework.

For companies, the first practical lesson is clear: promoting internal innovation initiatives or corporate venturing can create value, but their success depends on how well the organization understands and manages its environment. Firms that ignore these “unwritten rules” of the market—from local culture to collaboration dynamics—risk seeing their entrepreneurial efforts diluted.

Understanding the role of dynamic capabilities

The most important finding of our study is the central role of dynamic capabilities in corporate entrepreneurship. These capabilities—such as sensing opportunities, seizing them, and reconfiguring the organization—act as the true bridge between the institutional context and business results. The analysis confirms that the environment deeply shapes how firms learn and transform.

In emerging economies, competitive advantage does not depend solely on having more resources, but on using them with greater agility. Successful firms are those that systematically monitor the market, interpret weak signals from the environment, and adjust their structures ahead of competitors.

Based on our findings, the recommendations vary by type of organization:

• For large corporations, launching internal innovation programs or corporate venture capital (CVC) units is not enough if the organization does not develop mechanisms to learn from the environment and reconfigure quickly. Our research suggests strengthening market intelligence systems, promoting collaboration with external actors—especially universities and startups—and building structures that enable rapid knowledge absorption.

• For small and medium-sized enterprises (SMEs), although many operate with fewer resources, the study suggests they can compensate by developing agile dynamic capabilities and relying on informal trust networks. In contexts where formal institutions are imperfect, close relationships with customers, suppliers, and partners can become a critical source of advantage.

• For entrepreneurs, the institutional environment is not only a constraint; it can also be a source of opportunity. In Latin America—where significant institutional voids persist—many innovations emerge precisely to solve systemic frictions. Those who are able to read these inefficiencies and turn them into business models often build high-impact ventures.

Although some countries in the region have made legislative progress, from a public policy perspective it remains necessary to strengthen collaboration between corporations and startups, promote external corporate venturing, and build regulatory frameworks that reduce uncertainty for innovation investment. As our study suggests, corporate entrepreneurship creates value when organizations develop the ability to move intelligently within their institutional reality. 

For organizations across the region, the challenge is no longer simply to become more innovative; it is to effectively combine internal entrepreneurship with dynamic capabilities. By doing so, Latin American firms will be better positioned to turn environmental uncertainty into competitive advantage.