Becoming an entrepreneurial and innovative HEI is an incremental and long-term organisational development project, which requires the development of a supportive institutional culture combined with a sustainable and diverse financial base. The ultimate aim of an entrepreneurial HEI is to embed innovation and entrepreneurship into the organisation in a way that they become part of the organisation´s culture and its values, policies, structures and practices.

The baseline for establishing an entrepreneurial culture in an HEI is its current communication culture. The senior management will need to take into account the HEI’s traditions, cultural hierarchies and rigidities. Different groups of staff may have different preferences and protocols. Promoting an entrepreneurial culture will also require a long-term perspective and the co-ordination and integration of entrepreneurship activities.

In addition, having a balanced, varied, long-term and sustainable funding base is key. A sustainable multi-source financial strategy will need to be based on an institutional approach and backup from senior management as well as sufficient allocation of resources (personnel & time).

There are a variety of different external and internal funding and investment sources:

• External sources include, for example: businesses, banks, development agencies, business associations, local and regional governments, research foundations, international (donor) organisations, and sponsorships from individuals
• Examples of internal sources are: revenues from spin-offs, licensing and other forms of research commercialisation, from consultancy and other advisory services undertaken by staff, student initiatives, and sponsorships from alumni

For a strategic and efficient use of external sources of funding, it is important to continuously engage funders and investors, to record relevant information about project implementation, to monitor partners, and to share this information within the organisation. Establishing a central office or position within management can be useful to:

• Ensure the financial strategy has institutional back-up from senior management
• Ensure co-ordination and institution-wide exchange of information, and,
• Facilitate external communication, and avoid duplication of fundraising efforts

This will be of particular importance for HEIs where faculties have a high degree of autonomy in dealing with external stakeholders.

In the majority of HEIs, the allocation of the budget depends upon a number of indicators, for example, success in external research funding acquisition. This should be expanded to include the acquisition of external funding through entrepreneurial and innovative activities. This will facilitate collaborative efforts between HEIs and their partners in industry and the government.

When widening the range of external sources of funding, HEIs need to be aware of the major challenges:

• Some of the above-mentioned sources will not necessarily generate substantial and steady funding. For example, alumni and wealthy individuals often sponsor the running costs of chairs, centres, education activities, consultancy activities, and do not represent a significant injection of funds into the HEI
• Revenues from academic spin-offs may neither be sustainable nor substantial income streams and will depend upon the successful introduction of revenue-sharing models
• Further, control mechanisms should be put in place to ensure that HEIs do not overly depend upon external investors and their agendas. This should be part of the monitoring and evaluation of the financial strategy of the institution
• Demonstrating the value of their entrepreneurial activities to their financial partners. For example, the impact of an entrepreneurship centre on entrepreneurial mindset creation amongst the student population

In the long run, the involvement of key staff is needed across all faculties and departments as the channelling of funding towards the entrepreneurship and innovation is likely to withdraw funding from elsewhere. Entrepreneurship promotion activities with long-term planning and resourcing will be considered more acceptable by internal and external stakeholders because of their higher likelihood of impact. Incentives and rewards can help to overcome opposition and to generate buy-in from faculties, departments and schools.