Small is the new big. Globally SMEs are taking a centre stage in the promotion of economic development to employment generation and women empowerment. The SMEs constitute over 90% of total enterprises in most of the economies. Due to changing global economic scenario SMEs are visualizing a ray of hope. On the other hand, due to fierce competition they are forced to work on competitive advantage for sustainable growth. Innovations are required to achieve competitiveness. and for Innovation requires proper Knowledge Management. Intellectual capital is a new buzz word. Globally organizations have acknowledged the importance of knowledge workers and their knowledge. Many SMEs have also realized the importance of Knowledge Management and implemented it successfully, while some are working on it.
TopIntroduction
Small is the new big–Globally SMEs are taking a centre stage in the promotion of economic development to employment generation and women empowerment. The SMEs constitute over 90% of total enterprises in most of the economies. Due to changing global economic scenario SMEs are visualizing a ray of hope. On the other hand due to fierce competition they are forced to work on competitive advantage for sustainable growth. Innovations are required to achieve competitiveness. and for Innovation requires proper Knowledge Management. Intellectual capital is a new buzz word. Globally organizations has acknowledged the importance of knowledge workers and their knowledge. Many SMEs have also realized the importance of Knowledge Management and implemented it successfully, while some are working on it.
This chapter focuses mainly on Indian SMEs (Small and Medium Enterprises) for discussion specifically because of two main reasons. Firstly India has nearly three million SMEs, which account for almost 50 percent of industrial output and 42 percent of India’s total exports. They are the second biggest employment generators after agriculture. These account for 50 percent of private sector employment and 30 to 40 percent of value-addition in manufacturing. Secondly as a result of globalization and liberalization, coupled with WTO regime, SMEs have been passing through a transitional period. Today the SMEs are facing certain sustainability challenges in the form of poor financial resources, low R&D, lack of skilled human capital, lack of apt leadership and consultancy, lack of latest technological up -gradations.
Government was and is putting efforts to promote and foster the growth of SMEs with the help of certain initiatives. The Government’s vision is every indication that the SME sector is set to witness incredible growth in the years to come. To come out of this impending scenario the SMEs has to put much emphasis on creation of Innovative quality products at cheaper cost. Knowledge Management is the activity or initiative that any organization puts in place to enable and facilitate creation, sharing and use of knowledge for organizational benefit.
The chapter focuses on Knowledge Management in SMEs mainly from perspective of innovation and organisational learning.