Modelling the value of external networks for knowledge realisation, innovation, organisational development and efficiency in SMEs

Robert B. Mellor

International Journal of Knowledge-Based Development, 2015, vol. 6, issue 1, 3-14

Abstract: A 3D folded pseudo-Markov net is presented that illustrates a knowledge-based theory of the growth of SMEs via their knowledge assets. Modelling using Markov chain Monte Carlo methods (i.e., shooting virtual balls down the fold and plotting their final scatter distribution) has indicated significant financial gains if 50% individuals in management were 'innovators' but those results did not account for external networks of the managers involved. Results show for improved performance, the possession of relevant networks to realise 'just-in-time' knowledge from external sources appears approximately as important as internal innovation. With open internal information gatekeeping, the ratio of innovators in management can be as low as 1:6. It is known that start-ups with a large proportion of innovators are likely to perform better than those where innovators are added later on, but these results indicate that the difference can be evened out if latecomers can access external 'just-in-time knowledge'.

Keywords: financial returns; firm growth; innovation; just-in-time knowledge; JIT knowledge; MCMC; Markov chain Monte Carlo; modelling; SMEs; network value; external networks; knowledge realisation; organisational development; efficiency; small and medium-sized enterprises. (search for similar items in EconPapers)
Date: 2015
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