The synergistic role of intellectual capital in fostering innovation in indian SMEs

Integrating intellectual capital and supplier knowledge enables a manufacturer to apply existing knowledge innovatively, reducing the lead time and cost. Intellectual Capital plays a vital role in a firm’s ability to utilize its knowledge and the database lies the foundation of the innovation capability. The investment in knowledge infrastructure is essential as India’s knowledge economy remains revamped. The relationship of IC with the innovation capability of the firm is still unclear. Thus, it is possible to understand the relationship between IC and Firm Innovation Capability in the Indian SME context. To fulfill the research gap, this research relies on Firm Innovation Capabilities as a predictor to recognize the influence of intellectual Capital in Indian SMEs. The questionnaire was designed using a seven-point Linkert scale to get more accuracy in response and data was collected from the manufacturing and service sectors. The study provides a significant theoretical contribution to SME literature and provides a scope to understand the innovation capabilities of SMEs in emerging economies.