Has the Innovation Process in Small Business Been Completely Explained? A Study Through Social Capital Theory

Abstract

Currently, the innovation process in small businesses faces a huge challenge due to the low level of success of innovation ideas and products. This study aims to discover the missing aspects of building the innovation process by conducting an inductive study of small businesses in Indonesia. This study employs a qualitative approach with seven case studies using in-depth interviews and observations. The novelty of this study is discovering three main themes in the successful innovation process in small businesses, namely personal values, which create leadership style, organizational values, and culture adoption. Following that, the findings may complement the previous innovation process model and enrich the innovation literature.. This paper draws on social capital theory to discuss the theoretical implications, and on the practical side, the findings can assist entrepreneurs in what basic elements to understand and what to do before starting the innovation process. This study contributes to the ongoing debates on suitable innovation processes for small businesses.