Using capital theory to explore problem solving and innovation in small firms

Purpose This study investigated how small firms work at a micro-level, applying Bourdieu’s Capital Theory to give insight into the way individuals use the social and cultural capital at their disposal, to innovate and solve problems. Design/Methodology/Approach We applied qualitative methods to explore problem solving and innovation activities at the micro-level in small firms, using interviews and thematic analysis. Findings Our findings reveal that, compared to firms with lower levels of social and cultural capital, firms which possess higher levels of social and cultural capital have a higher success rate in problem solving and are more likely to engage in innovative activity. Social and cultural capitals complement and reinforce one another in small firms, for example an enhanced ability to utilise networks (social capital) allows small firms to access a greater diversity of knowledge (cultural capital). Originality/Value Little is known about how different forms of capital are utilised in the day-to-day operations and problem solving of small firms: the application of Bourdieu’s Capital Theory offered an original frame in which to explore these activities.