Individuals’ capacity to innovate: a literature review of individual absorptive capacity

Absorptive capacity refers to a firm's ability to evaluate the value of the external knowledge, understand it, and utilize it to generate innovative outcomes. In essence, firm's absorptive capacity is built on the absorptive capacity of its individual members. However, prior reviews and meta-analyses on absorptive capacity only covered the studies at the organisational level, paying limited attention to individual absorptive capacity. To fill this research gap and to respond to the emerging call for a micro-foundation perspective in organisation and strategy research, we conduct a systematic review of the literature on individual level absorptive capacity. Our review reveals that (1) individual absorptive capacity is widely regarded as a multi-dimensional construct and its definition is primarily derived from and consistent with the conceptualization of organisational absorptive capacity; (2) the majority of past studies adapt the existing measures of organisational absorptive capacity and adopt survey approach to measure individual absorptive capacity; (3) a series of micro-level and macro-level factors can influence an individual's ability, motivation and opportunity to assimilate and take advantage of external knowledge, thereby playing a role in the development of individual absorptive capacity; (4) individual absorptive capacity can contribute to a variety of meaningful outcomes such as knowledge transfer, innovation and creativity. Based on our review of the findings in past research, we also identify research gaps and propose research directions for future research to further explore and extend this body of literature.