The role of knowledge management in facilitating innovation for sustainable SMEs performance

This paper formulates a framework postulated innovation as mediator of the relationship between knowledge management practices and SMEs Performance. Knowledge management and innovation are believed have an important impact on sustainability and organizational performance. Thus, analyzing these concepts is critical for creating competitive advantage for an organization´s survival. Management team or governing bodies require to have strategies to generate, modify, and manage knowledge in order to continue their innovation capability, thus boost organizational performance. Hence, the main aim of this study is to examine the relationship between effective knowledge management strategies with technological and organizational innovation in sustaining SMEs performance. This study is important for organization desire to increase innovation capabilities, especially small, developing and geographically disconnected countries that have traditionally seen innovation through early adoption as opposed to active involvement. Particularly in Malaysia, Small Medium Enterprises (SMEs) have a very high potential in supporting nations´ economic development and wealth creation. Despite all the governments´ supports, SMEs experience difficulties at the early stage of their organizational growth. Therefore, the SME needs to evaluate survival ability, and improving their current strategy in innovation to compete and sustain in the market. Thus, this study proposes to investigate the relationship between knowledge management and innovation in Malaysian SMEs. This study also will propose a conceptual model to further understand factors contribute to success in innovation capabilities.