ICT and KM, Drivers of Innovation and Profitability in SMEs

Abstract

For more than two decades, the literature has shown that information and communication technology (ICT) and knowledge management (KM) are among the best business practices in the development and competitiveness of large corporations. Recently, for small- and medium-sized enterprises (SMEs), these elements have represented a challenge and an opportunity for the consolidation of innovation processes, knowledge protection, and the path to sustained profitability. The aim of this paper is to analyse the effects of ICT on KM and their link with innovation and intellectual property (IP) in order to identify how SMEs can achieve higher yields. The data were obtained from a self-directed survey administered to the managers of 412 industrial and service companies established in Northwestern Mexico. Partial least squares structural equation modelling (PLS-SEM) was used for the statistical analysis of the data. This work contributes to the development of the literature on the strategic management of SMEs, particularly in relation to the theory of resources and capabilities (TRC) and the theory of dynamic capabilities (TDC). The results show that ICT significantly influences KM, innovation and profitability. In addition, KM significantly influences innovation, and innovation and IP management significantly influence profitability. However, innovation does not influence IP management.