Abstract
This study explores the strategic links between organisational capital and innovation performance in Australian SMEs. This study classified organisational capital as information technology as per hardware and software; and equipment or machinery that was applied in the firm. A sample involving SME from various industries was adapted from the Business Longitudinal Database (BLD) from the Australian Bureau of Statistics (ABS). The analyses validate that information technology capabilities is essential for achieving innovation performance. However the relationship decline over time for different type of innovation. Thus, SME managers should be carefully in investing in appropriate information technology in order to facilitate innovation in their firm.
 Key Words: SMEs, Organisational capital, Innovation, Australia
Highlights
According to Wheelen and Hunger (1999), 24 percent of new business in the America fails within two years of operating and 63 percent terminates the business within six years in the services
The Poisson regression analysis (PRA) shows that Organisational Capital (OC) improves product innovation better in the long term, compared to short term
There is a 1 percent improvement after a two-year lag
Summary
According to Wheelen and Hunger (1999), 24 percent of new business in the America fails within two years of operating and 63 percent terminates the business within six years in the services. Similar patent has been identified in Australia (Lu & Beamish, 2001). According to the Australian Bureau of Statistics (ABS) (2016), in June 2012, 13.1 percent of SMEs has stopped operating their business. The number of Small and Medium Enterprise (SME) that close down their business in Australia is increasing every year. A surviving business is defined by ABS (2012) as a business which is active on the Australian Bureau of Statistics Business Register (ABSBR) at 1 June of the current year and was active in the previous year
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