The Relationship Between Knowledge Management and Innovation Level in Mexican SMEs: Empirical Evidence

The transformation of the current society from an industry-based economy to a knowledge management and innovation-based economy is changing the design and implementation of business strategies and the nature of the competition among the organizations which are mainly small and medium-size enterprises (SMEs). They struggle to survive in a market which is more demanding and competitive, so they see knowledge management as one of the most effective strategies that may help to enable the innovation activities into the businesses. For these reasons, this research paper has as a main goal to analyze the relationship between knowledge management and innovation in Mexican SMEs. The empirical analysis used 125 manufacturing SMEs (each SME having from 20 to 250 employees) as a sample to be carried out. The obtained results indicate that knowledge management has a positive impact in products, process, and management systems innovation.