Knowledge Management for SMEs in the Knowledge-Based Economy

In the knowledge-based economy firms are faced with much more capricious and diverse consumer preferences than ever. These consumers are increasingly interested in status, reputation, brand names, design, satisfaction, and post-sales service. Also, life span of products and services is shortened. In general, the advance of information technology and the advent of knowledge-based economy as the result of IT make the business environment for the average entrepreneur more complex. Knowledge can be used to reduce these complexities. The aim of this paper is to point out that knowledge is the factor that allows entrepreneurs to distinguish themselves from their competitors. Knowledge is the means for SMEs to overcome poor business environment and change the complex business environment to be manageable. The main research goal of this paper is to form and present a model for knowledge management which would help SMEs to be able to interpret the environment complexity and extract implications from that. The last is actually the expected result: the application of the model should stimulate building competitive advantage and support the firm’s competitive position