Knowledge Management Configurations in Italian Small-to-medium Enterprises

Small and medium enterprises (SMEs) still compete on efficiency/flexibility in manufacturing existing relatively stable products. This source of competitive advantage will hardly be viable in the near future for Western Europe SMEs that have to compete with low cost companies from Eastern Europe and developing countries. To survive, they will rather have to improve products and processes, exploiting their intellectual capital in a complex network of knowledge-intensive relations inside and outside their boundaries. The managerial challenge, then, consists of creating new knowledge management (KM) configurations in terms of technological and organizational tools leading to organizational models sustainable from the competitive point of view. By providing quick and easy access to external sources of knowledge, new information and communication technologies (ICT) can erase traditional constraints on SMEs innovation ability and foster intra/inter-organizational integration. In the area of product innovation (PI) the use of Internet based applications, product data management (PDM)[1], virtual prototyping, computer aided design (CAD), is expected to substantially reshape the overall KM process (Baba and Nobeoka, 1998; Thomke, 1998; Thomke, et al., 1998). Despite this alleged competitive role, it is widely recognized that the application of new ICT tools in SMEs is still lagging behind. Literature on ICT adoption/implementation in PI is almost totally based on evidence from large companies (Harvey et al., 1992; Lefebvre et al., 1996; Raymond et al., 1996; Mechling et al., 1995). This article offers the results of an empirical research analyzing not only the different ICT approaches and the internal processes of knowledge transfer and consolidation, but also the factors influencing them in 47 Italian SMEs. While confirming a general gap in the application of new ICT tools, this study sheds light on the trends that are emerging today in selecting ICT patterns and KM internal approaches in new product development (NPD).The paper is articulated into five further sections. The following two respectively present the state of the art literature on ICT in SMEs and the methodology for the empirical study. Section four discusses results from the field studies, while, in section five, implications for managerial theory and practice are discussed and suggestions for further research undertakings are provided.