Does personality matter? Small business owners and modes of innovation

The DUI (learning by doing-using-interacting) mode offers a promising theoretical framework to explain why many small- and medium-sized enterprises (SMEs) are successful in innovation without research development (R&D) efforts. In this context, we argue that—because of the informal, person-centered, interactive nature mode—small business owners should be key position trigger learning processes at company level. Based on large SME data set from Germany, show empirically that Big Five personality traits small positively affect self-selection into DUI-based less R&D-intensive SMEs. That is, companies operating largely under seem benefit particular certain owners’ characteristics. addition, present novel evidence complementarities between different exist terms mode, thereby pointing role prototypes. paper concludes with implications for policy further research. Solving puzzle—resilient owner personalities boost firm innovativeness. This psychological effect only exists non-R&D SMEs, providing new explanation their surprising success. involved most day-to-day activities company. An owner’s therefore directly affects external internal communication flows, laying foundation company’s culture. We resilient type—an who is characterized emotional stability, openness, extraversion, conscientiousness—benefits According our analysis, about 5.5% more likely an within builds non-R&D-based knowledge, communication, interaction. Our implies entrepreneurship education consultancy foster self-awareness, increase understanding his/her effective firm-level innovation. Successful not fully determined one’s type, but knowing own strength weaknesses can help carve out niche, defining scope responsibility, as well its limits.