Role and Room for Knowledge Management in Small and Medium Enterprises

Background

One of the most significant evolutions in the business environment over the past decade is the dawn of the new economy. In particular, the management of knowledge assets may provide small firms new tools for survival, growth and maintaining a sustainable competitive advantage (Omerzel & Antoncic, 2008). There is a general accord in business practices and academia on the fact that SMEs are falling behind large companies in developing KM practices and benefits of KM has not fully exploited by these firms. This is reflected in a literature gap where little research efforts have been carried out on this topic. There is abundance of literature describing how various large companies are successfully practicing KM, but the reasons why small firms show poor usage of KM tools are still unclear. In fact, little empirical studies have been conducted to identify the factors influencing KM adoption in SMEs (Finkl & Ploder, 2009). In addition, there is a growing need for qualitative analysis of the effects of knowledge management practices of networked SMEs (Valkokari & Helander, 2007). The potential which KM offers in improving efficiency and innovation has been cited as a key source of competitive advantage (MacKinnon et al., 2002).