Interpersonal relationships, digital technologies, and innovation in entrepreneurial ventures

Innovation research has not presented an integrated model of how knowledge sources emerging from managers' interpersonal relationships facilitate innovation within new ventures. Further, it remains unclear how such knowledge transfer may be shaped by the advance of digital technologies. This study examines how these knowledge sources and the context of the digital technologies in which they are produced influence the quality of knowledge developed by entrepreneurial ventures. Our results show that parent firm and co-inventor innovativeness significantly impact venture knowledge quality, with this benefit significantly enhanced when parents possess superior information technology systems. We also find that geographically proximate innovations provide similar benefits, though they are mitigated in regions with greater adoption of computer technologies. We test our predictions on a sample of 632 biotechnology ventures founded over a ten-year period, tracking their innovations over a subsequent ten-year period. We contribute to research on entrepreneurship, geographic location, and knowledge creation. •We study how interpersonal relationships help knowledge development in new firms.•Also, how important are the IT/ digital capabilities of such knowledge sources?•We test our hypotheses on a sample of biotech firms founded during 1990–2000.•We find that former colleagues of firm managers remain valuable knowledge sources.•Local acquaintances in similar firms can also become important knowledge sources.