Olga Lavrinenko

Knowledge management and the incresase of SME competitiveness: a case study

22 The need to enhance the competitiveness and innovation capacity of small and medium enterprises is one of the key objectives of emerging EU economies. In this regard, the authors define the role of knowledge in enhancing business competitiveness in a regional economy. The effect of knowledge management processes on the economic activity of businesses in the Latvian region of Latgale is considered. To assess the role of knowledge and knowledge management processes, the authors apply integrated metrics calculated with the help of correlation analysis based on a 2013 survey of managers and staff of SMEs in Latgale. An assessment of the role of knowledge and knowledge management processes in SMEs of Latgale region using the SPSS programme shows that the knowledge and experience of employees have is at an average level of development — from 2.9 to 3.6 on a 5 point scale. It suggests the possibility of that the processes of knowledge management are not used to their full capacity at the regional small and medium-sized businesses; therefore, there is untapped potential for enhancing the competitiveness of these enterprises. The study emphasizes the need for regional businesses to interpret new knowledge as a key value for developing the competitive and innovative potential.