Julian Birkinshaw, Professor of Strategy and Entrepreneurship at the School, said encouraging workers to come up with innovative ideas and products will help businesses to stay youthful and competitive in the market.
Commenting on the drop in firms with entrepreneurial divisions, Professor Birkinshaw said: "It is frustrating. In theory, they should work. But these divisions are fragile and there are so many ways they fail."
He said that many companies neglect these schemes because they believe they do not generate as much revenue as other products, or because they are not thought to be core to the parent group.
Professor Birkinshaw added that multinational firms such as IBM and Unilever have offered divisions devoted to nurturing innovative ideas for decades.
Google has applied the concept across the whole organisation, which has led to the development of new products such as Gmail.
Professor Birkinshaw said top executives need to champion these initiatives if they are to have any chance of success - and even then, many disappear after only a few years.
A recent survey among US workers found that chief executives have started to concentrate more on entrepreneurialism over the past five years, but staff still believe more needs to be done to encourage the development of new ideas.