Small business owners as gatekeepers of knowledge? : personality traits & modes of innovation

Previous research has established that certain personality traits represent predictors of start-up activity. We argue that similar cognitive processes that affect entrepreneurship also play a role in firm-level innovativeness. For example, open-ness to novelty can be regarded as a key component of entrepreneurial alertness in terms of both business creation and the generation of innovations within existing businesses. Based on a large survey of less R&D-intensive SMEs from Germany, we show that certain Big Five personality traits as well as certain personality prototypes of business owners are positively related to innovation activity. More importantly, this relationship depends on the mode of innovation, where companies operating under the DUI mode (Doing-Using-Interacting) seem to benefit in particular from certain owners' personality characteristics. In addition, we present evidence that complementarities between entrepreneurs' personality traits exist in terms of self-selection into the DUI mode. To explain our findings, we argue that the personali-ty characteristics of small business owners affect whether or not absorptive capacity can mediate between external knowledge and firm-level innovativeness.