Knowledge networks as a source of knowledge initiatives and innovation activity in small and medium enterprises regression analysis for eu 27 countries

Abstract

Building-up the knowledge society through human capital and innovation activities, particularly generated through SMEs are generally the driving force of economic development, are developing options for future competitiveness in the form of new knowledge, and are increasing the efficiency of the economy and its ability to act. Since countries like Finland, Germany, Denmark and Sweden reach highest innovation performance among all EU countries, there are countries like Latvia, Lithuania, Romania, Bulgaria, Poland or Slovakia which drag behind other European countries and rank among the countries with the weakest innovative performance. The aim of this paper is to identify the enablers of innovation in European SMEs by using the concept of intellectual capital. Through statistical analysis we have investigated how knowledge networks, which can be considered as the source of knowledge initiatives in SMEs, contribute to their innovation activities. According to conclusions of our analysis, creating knowledge network, which secure knowledge circulation and spilling over partners consisting of universities, state or local governments and SMEs, will increase knowledge base of the economy of a country, i.e. will grow the innovation activity of enterprises, improve the quality of human resources, research and technology, which are considered as key factors of European competitiveness.