Strengthening technological innovation capabilities in software SMEs via employees’ self-efficacy and collaborative culture: the mediating role of tacit knowledge seeking and the moderating role of employee trust

Why the Human Side of Tech Innovation Matters

When we think about high‑tech breakthroughs, we often picture powerful computers and cutting‑edge code. Yet for many small and medium‑sized software companies, especially in developing countries, the real engine of innovation is far less visible: what people know, how willing they are to learn from one another, and how they work together. This article explores how employees’ confidence in their own abilities and a cooperative workplace culture can help small software firms generate new ideas and technologies—largely by encouraging people to seek out the unwritten, experience‑based know‑how that colleagues carry in their heads.

Hidden Know‑How Inside Growing Software Firms

The study focuses on software companies in Pakistan, a rapidly expanding part of the tech economy that must compete with global giants while operating under tight resource constraints. In such firms, manuals and databases capture only a fraction of what matters. The most valuable insights—how to debug tricky systems, deal with demanding clients, or adapt tools under pressure—are often tacit: they live in people’s experiences, habits, and informal problem‑solving tricks. Asking for this kind of help is not always easy. Employees may worry about looking incompetent or imposing on busy peers, yet the willingness to seek this hidden know‑how can make the difference between a stagnant product line and a company that continually improves its technology.

Confidence, Team Spirit, and the Willingness to Ask

To understand what encourages people to seek tacit knowledge, the researchers drew on a psychological framework called social cognitive theory, which emphasizes how personal beliefs, behavior, and surroundings reinforce one another. They surveyed 299 employees across 35 Pakistani software firms, measuring three main elements: how confident workers felt in handling new tasks and tools (self‑efficacy), how collaborative the company culture seemed (for example, whether ideas and problems were openly discussed), and how willing employees were to approach others to learn from their skills and experience. They also assessed each firm’s technological innovation capabilities, such as adopting new ideas, using cross‑functional teams, and keeping up with the latest technologies.

How Quiet Learning Fuels New Technologies

The results show a clear pattern. Employees who feel more capable are not only more likely to help their company innovate; they are also more inclined to seek tacit knowledge from colleagues. Likewise, workplaces that emphasize cooperation and open communication see higher levels of both knowledge seeking and technological innovation. In other words, personal confidence and team‑oriented culture strengthen innovation partly because they nudge people to ask questions, observe skilled peers, and absorb unwritten practices. Statistical analyses indicate that this willingness to seek tacit knowledge acts as a bridge: it partially explains how self‑belief and collaborative norms translate into better technological outcomes, such as more frequent adoption of new tools and problem‑solving approaches.

When Trust Does Not Work as Expected

The authors also examined whether employee trust—belief that colleagues and the organization will act fairly and use shared expertise responsibly—changes how strongly tacit knowledge seeking boosts innovation. Surprisingly, they found no meaningful moderating effect. Even in firms where workers reported relatively high trust, the link between seeking tacit knowledge and innovation was not significantly stronger. The researchers suggest that in competitive, project‑driven software environments, other forces may dilute the impact of trust. Employees may still hide knowledge or focus on individual career gains, limiting the extent to which general feelings of trust translate into concrete learning and sharing behaviors.

What This Means for Small Software Companies

For leaders of small software firms, particularly in developing economies, the message is straightforward but powerful. Investing only in new tools and formal training is not enough. Building employees’ confidence to tackle unfamiliar technologies and deliberately nurturing a culture where people freely ask for and offer help can unlock the rich, tacit know‑how already present in the organization. When staff feel capable and work in teams that value open discussion, they are more likely to learn from one another in everyday interactions—and that quiet, ongoing exchange of experience is what steadily strengthens a company’s ability to develop and adopt new technologies.

Citation: Xiao, D., Sherani, M. & Sui, X. Strengthening technological innovation capabilities in software SMEs via employees’ self-efficacy and collaborative culture: the mediating role of tacit knowledge seeking and the moderating role of employee trust. Humanit Soc Sci Commun 13, 438 (2026). https://doi.org/10.1057/s41599-026-06784-1

Keywords: tacit knowledge, software SMEs, collaborative culture, employee self-efficacy, technological innovation