Small Firms, Institutions and Interactions: Low-Technology Innovations from the Perspective of Critical Realism

Abstract

Sectors or industries characterized by limited or no use of technology to innovate are called lowtechnology (LT) sectors. They are usually dominated by small firms. Identifying a dearth of academicand practitioner work, this paper helps explain how institutions within a small-firm sector and interactions of these firms with institutions influence the occurrence or non-occurrence of LT innovation. Marble sector firms primarily located in north-west Pakistan have been selected for this purpose. Advocating the need for critical realism that has been an often ignored paradigm in management research, this paper offers a unique perspective on the paradigm's fundamental tenets which are events, objects, mechanisms and causal powers through an extensive and robustqualitative analysis using case study methodology. Findings reveal strong normative and cognitive institutions but weak regulative institutions with varying levels of consistencies or otherwise in terms of small firms' interactions with these institutions. Interestingly, cognitive institutions emerge as the main barrier to LT innovation which is a key contribution of this paper along with a hard tofind critical realist perspective. Keywords: Low-technology innovation, LT innovation, institutions, interactions, critical realism