Carlos Quandt, Cicero Bezerra - The relationship between knowledge management, innovation and revenues: a survey of incubated firms in Brazil

1. The relationship between knowledgeThe relationship between knowledge
management, innovation and revenues: amanagement, innovation and revenues: a
survey of incubated firms in Brazilsurvey of incubated firms in Brazil
Carlos Quandt
Cicero Bezerra
Business School – Pontifícia Universidade Católica do Paraná – Brazil
2014 BALAS Annual Conference
April, 9-12, 2014 - Port of Spain,Trinidad and Tobago

2. AgendaAgenda
• Objectives
• Motivation
• Theoretical background
• Questionnaire
• Analysis Protocol
• Results
• Final remarks

3. ObjectiveObjective
• To verify the relationships among
– perceived effectiveness of
knowledge management
practices,
– investment in innovative
activities and
– revenues of TBFs graduated by
incubators.

4. MotivationMotivation
• Relation between incubating process and
KM practices
– (Somsuk, Wonglimpiyarat & Laosirihongthong, 2011;
Ratinho & Henriques, 2010).
• Disposition of incubated companies to invest
in innovation-related activities
– (Schwartz, 2011).
• Lack of consensus about economic
performance of graduated companies
– (Kilcrease, 2011).
• Few studies on deployment of knowledge
assets in TBFs
– (West & Noel, 2009).

5. Theoretical BackgroundTheoretical Background
• Incubators and graduated companies
– Somsuk, Wonglimpiyarat & Laosirihongthong, 2011; Ratinho &
Henriques, 2010; Schwartz, 2011; Bøllingtoft, 2012; Bruneel et
al, 2012; Ahmed & Ingle, 2011; Kilcrease, 2011; Qian, Haynes
& Riggle, 2011.
• Knowledge Management
– Nonaka, 1991; Christopher & Tanwar, 2012; Goel, Rana &
Rastogi, 2010; Pfaff & Hasan, 2010; Sveiby, 2001; Saini, 2013;
Linderman, Schroeder & Sanders, 2010; Dalkir, 2011; Batista,
Quandt, Pacheco & Terra, 2005.
• Innovation
– Ribière & Walter, 2013; Krogh, Nonaka & Rechsteiner, 2012;
Camelo-Ordaz et al, 2011; Charterina & Landeta, 2013; Oslo
Manual, 2005; Prester & Bozac, 2012.

6. SurveySurvey
• 12 incubators in State of Paraná
– 95 graduated companies
• 24 no longer available
• 52 respondents

7. QuestionnaireQuestionnaire
•Perception of effectiveness of KM practices
• HR Management: rewards for initiatives, informal
gathering (virtual or face-to-face) of people to discuss
organizational problems, coaching and mentoring, formal
corporate education programs, knowledge specialist
networks.
• Organizational policies: rewards for development of
individual skills, internal and external benchmarking,
documentation of learnt lessons and best practices,
formal identification of individual and organizational
competencies, establishment of formal KM strategy and
policies.
•ICT-related practices: portals, communication and
collaboration tools, business intelligence systems,
electronic document management, ERP systems.

8. QuestionnaireQuestionnaire
• Investments in innovation
– Acquisition of external knowledge
– Acquisition of software
– Machines and equipment
– Training
– Internal R&D
– External R&D

9. QuestionnaireQuestionnaire
• Revenues
– Micro: under R$ 360 K
– Small: up to R$ 3.6 M
– Medium – group IV: up to R$ 6 M
– Medium – group III: up to R$ 20 M
– Large – group II: up to R$ 50 M
– Large – group I: more than R$ 50 M

10. Analysis ProtocolAnalysis Protocol
Step Objective Procedure
1 Evaluate the internal reliability of the sets of questions
submitted to the respondents
Cronbach's Alpha
2 Provide a general vision of the characteristics of
respondent companies
Descriptive statistics
(averages, standard
deviations, frequencies)
3 Categorize the variables that represent graduate
companies in relation to their investments in innovative
elements and perceived efficacy of KM practices.
Percentage frequency.
4 Determine the number of dimensions to be analyzed Eigenvalues, intertia and
scree plot
5 Verify the existence of associations between variables Multiple correspondence
analysis
6 Evaluate the reliability of the set of variables chosen to
be represented in the dimensions
Cronbach's Alpha
7 Evaluate the intensity of the association between
grouped variables
Pearson's correlation
coefficient (r)

11. ResultsResults
Statistic Consultancies Software Equipment Training
Internal
R&D
External
R&D
Average 0.14 0.40 0.92 0.91 2.54 0.19
Standard
Deviation
0.29 0.43 0.92 0.79 1.54 0.36
Investments in innovation as a percentage of revenues

12. ResultsResults
Perception of effectiveness of KM practices (frequencies)
Practice 0 1 2 3 4 5
Initiative rewarding 0.00 0.00 11.54 46.45 36.54 5.77
Informal grouping 11.54 9.62 19.23 19.23 32.69 7.69
Coaching and mentoring 5.77 15.38 15.38 19.23 32.69 11.54
Corporate education 17.31 40.38 19.23 9.62 9.62 3.85
Knowledge specialists 15.38 11.54 11.54 17.31 26.92 17.31
Best practices 17.31 7.69 17.31 11.54 28.85 17.31
Benchmarking 0.00 5.77 9.62 30.77 36.54 17.31
Skill identification 7.69 11.54 17.31 21.15 28.85 13.46
Skill rewarding 9.62 7.69 11.54 36.54 28.85 5.77
KM Strategies 19.23 42.31 5.77 23.08 7.69 1.92
Corporate portals 13.46 15.38 15.38 21.15 23.08 11.54
Communication/collaboration tools 0.00 0.00 1.92 21.15 53.85 23.08
Business intelligence 34.62 25.00 19.23 9.62 7.69 3.85
Electronic document management 38.46 23.08 19.23 9.62 5.77 3.85
Management systems 11.54 11.54 15.38 17.31 30.77 13.46

13. ResultsResults
Multiple
correspondence
analysis

14. ResultsResults
Statistic Revenues
Investment in
innovation
HR
management
Organizational
policies
Information
technology
Revenues
r 1.000 0.247 0.685 0.736 0.668
p-value 0.000 0.779 0.000 0.000 0.000
Investment in
innovation
r 1.000 0.495 0.378 0.417
p-value 0.000 0.000 0.006 0.002
Human Resources
management
r 0.813 0.853
p-value 0.000 0.000
Organizational
policies
r 1.000 0.724
p-value 0.000
Information
Technology
r 1.000
p-value 0.000
Correlations

15. ResultsResults
Investment in innovation and revenues

16. Concluding remarksConcluding remarks
Most of the aspects related to the effectiveness of KM
practices are associated to revenues.
Companies that perceive greater effectiveness of KM
practices:
– invest more in innovation
– have higher revenues.
Microenterprises present a higher propensity to invest
in innovative activities than small ones – and as they
reach higher revenue levels, the investments in
innovation also increase.