Social capital as a source for innovation: An explanatory case study of two companies within the oil and gas industry

Jesper Egeland & Johann P. Birkeland

Student thesis: Master thesis


The thesis will investigate how social capital is a source for innovation and identify what forms of social capital more likely to enhance a company’s ability to innovate. With focus on the process of how employees and the management engage in the innovation processes, our emphasis is to determine how social capital is affecting the process and how it could become an asset positively related to innovation. The aim for this thesis is to reflect the need to consider and include different forms of social capital when deciding on innovation strategies and when managing the innovation process. Accordingly a qualitative approach has been applied, using an explanatory case study, based on semi-structured interviews with two companies in Norway (Depro AS and iQubeS AS). The companies were carefully selected on the basis of their innovative reputation in the Stavanger region, and their relation to the oil & gas sector which we characterize to be an interesting setting to explore the effect of social capital on innovation. In Depro AS we found that trust in the organization, and towards the competition is essential for their innovation process. We found that they operate in a closely linked community of operators, service providers and suppliers to develop new innovative solutions. Moreover Depro had a strong focus on community building, both in day to day operations, and when hiring new personnel. In iQubeS AS we found evidence for different forms of social capital, and a vital regional norm built on trust and shared experience. The combination of the forms of social capital aided the innovation process of the ‘information Quality System’ (iQS), and accordingly in establishing the iQubeS organization. The evidence for the significance of social capital was primarily apparent through the heavily networked founders and their trustful collaboration toward each other and toward external actors. The close tie between the founders prospered a creative collaboration with enthusiasm influencing the organizational culture, and is now an important asset in order to successfully expand the business. Our findings illustrates that both companies profit from a closed homogenous and trustful environment in the Stavanger region and the industry they operate within. The high level of trust in the region between supplier and customers has contributed to a secure and prosperous environment for innovations. However, we argue that both companies could benefit from exploiting their use of social capital and explore networks outside their immediate region to access more heterogeneous knowledge and diverse innovation networks.

EducationsMSocSc in Organisational Innovation and Entrepreneurship , (Graduate Programme) Final Thesis
Publication date2012
Number of pages105