Building Innovation Capability Through Entrepreneurship: Evidence from Universities of Applied Sciences

Abstract

This study examines how entrepreneurship promotion within universities influences organizational-level innovation capability. Innovation capability is defined as an institution’s capacity to foster innovation through the effective use of knowledge, resources, and collaboration, resulting in outcomes such as new products, processes, systems, research outputs, and innovative teaching methods (Lawson & Samson, 2001; Bartoloni et al., 2021). Rather than focusing on individual or team-level innovation, the study investigates how university staff perceive their institution’s overall ability to innovate. The study is grounded in the entrepreneurial university framework, which highlights universities’ evolving role as active contributors to innovation, economic development, and societal change (Clark, 1998; Etzkowitz, 2003). Building on prior research on organizational innovation capability (Lawson & Samson, 2001; Hero et al., 2017), this study addresses calls for a deeper understanding of its determinants in higher education contexts (Mendoza-Silva, 2021). Empirically, the study focuses on two organizational drivers of innovation capability: perceived management support for entrepreneurship and institutional support for student entrepreneurship. These dimensions reflect both strategic leadership and the entrepreneurial culture embedded in university structures and practices. Data were collected from two Finnish universities of applied sciences between November 2024 and January 2025, yielding responses from 134 staff members, including teaching and RDI personnel across disciplines. Organizational-level innovation capability, management support, and support for student entrepreneurship were measured using validated multi-item scales. Linear regression analysis was conducted, with the university included as a control variable. The results show that the model explains 56.2% of the variance in perceived innovation capability. Both management support for entrepreneurship and support for student entrepreneurship are positively and significantly associated with organizational-level innovation capability, with management support emerging as the strongest predictor. The control variable indicates some institutional differences, while the overall pattern of relationships is consistent across both universities. The findings contribute to research on entrepreneurial universities by demonstrating that innovation capability is embedded in organizational leadership and culture rather than solely in individual initiatives. Practically, the study highlights the importance of integrating entrepreneurship into institutional strategies and support structures to enhance universities’ long-term competitiveness, relevance, and societal impact.