Abstract
There are insufficient studies that investigate the connection between human, structural and relational capital and organizational innovation in Australian SMEs in the literature. Various SMEs industries, in Australia were adapted from Business Longitudinal Database (BLD) from the Australian Bureau of Statistics (ABS). This cross-sectional study shows that relational and human capitals are positive and significant towards process innovation while relational capital is the only predictor for product innovation. The results also show that human, structural and relational capitals were the most significant predictor for administration innovation. The findings show that relational capital has the most significant relationship between the three components of intellectual capital towards innovation in Australia SMEs. SME managers acknowledged the importance in collaboration towards achieving innovation performance in their firm. In order for SMEs to be a competitive advantage, managers should focus to improve their networking and collaboration with external parties, so that the whole innovation (product, process and administration innovation) can be achieve.
Highlights
There has been a rising credit since the 1980s, the importance of intellectual capital (IC) as a significance driver for a company especially to Small and Medium Enterprises (SMEs) (Dean & Kretschmer 2007; Kong 2010; Moingeon & Edmondson 1996; Hsu & Fang 2009; Huang & Liu 2005)
SME is being defined by the Australian Bureau of Statistics (2014) as those businesses that hire less than 200 employees
The antecedents of innovation performance are varied by innovation type, the effects of antecedents on product, process and administration innovation must be explained
Summary
There has been a rising credit since the 1980s, the importance of intellectual capital (IC) as a significance driver for a company especially to Small and Medium Enterprises (SMEs) (Dean & Kretschmer 2007; Kong 2010; Moingeon & Edmondson 1996; Hsu & Fang 2009; Huang & Liu 2005). Most of the SMEs throughout any country are facing similar situations that affect their viability in the market. The existence of these SMEs regardless from any state is considered to be critical for the country’s economic growth (Porter & Kramer, 2006). Intellectual capital can be consider as the most important element for SMEs to compete with larger companies (Desouza & Awazu 2006; Coyte, Ricceri & Guthrie 2012; Hudson, Smart & Bourne 2001). Knowledge is the most enduring competitive advantage for SMEs to compete and survive in the market (Hitt, Ireland and Hoskisson 2010; McEvily & Chakravarthy 2002)
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