Knowledge management and growth in Finnish SMEs

The impact of knowledge management on the financial success of companies has not yet been properly researched. This paper aims to make a contribution by examining the relationship between sustainable sales growth and knowledge management activities in 108 Finnish small and medium‐sized enterprises (SMEs).

Data were generated from a questionnaire survey of 108 SMEs from different fields and thematic interviews with ten companies.

Higher levels of KM‐maturity were found to correlate positively with long‐term sustainable growth. Although Finnish SMEs display a surprisingly high awareness about KM, only a minor proportion of the sample firms has been able to benefit in terms of growth from their KM‐related activities. The results have implications for policy formulation in the field of SMEs, since half the Finnish SMEs in the sample do not grow. We found that the fast‐growing companies with high KM‐maturity are applying KM‐related activities in a comprehensive and balanced way, thereby raising question marks around the effectiveness of eclectic “KM implementations”.

This research was carried out in only one country and the results cannot be generalised. Furthermore, this study does not provide any information concerning the causal relationship of knowledge management and SME performance. Therefore, further studies in the field are needed.

The results from this study also suggest that SMEs might be able to shift into higher growth by applying a comprehensive KM‐approach incorporating all intangible assets equally.

This study provides new information concerning the relationship between knowledge management and small business performance.