SME Dynamic Competence Mechanism

Since the implementation of reform and opening up policy, China’s economicdevelopment pace is gradually accelerating, as an important force in promoting thedevelopment of national economy, small and mid-sized enterprises, are also risingand developing rapidly. Tech SME gradually become an integral part of nationalinnovation and regional innovation.This kind of enterprise have an obviouscharacteristic, that is consider innovation as the company’s core competition, and ithas a strong knowledge attributes. However, now most Tech SME is facing a problemwhich always exists in the development. The problem is, with the rapidly upgradingof the modern science and technology and the shortening of industry life cycle, smalland mid-sized enterprise generally lack the ability to adapt to the environmentdynamic, in other words, it cannot timely and effectively reset its resources in therapid changing market environment, this situation finally results in the gradual loss ofcompetitiveness and vitality in the drastic change of environment. Therefore, smalland mid-sized enterprise needs to immediately find out how to improve the dynamiccapability to solve this long-standing problem.Since the1990s, the dynamic capability theory began to sprout anddevelopment, but for a long time, the study of dynamic capabilities still has some keyproblems which are not solved completely. Besides, although there have been lots ofresearches which prove that knowledge element play a key role in the evolution ofdynamic capabilities, but it failed to establish a interactive relationship between them.So in this paper, we research the dynamic capability of small and mid-sized enterprisefrom the perspective of knowledge management. It not only accord to the knowledgecharacter of such enterprise, but also can has a certain value of practice guidance forthe small and mid-sized enterprise to apply its knowledge to cope with the dynamicexternal environment and obtain sustainable competitive advantage. First of all, this paper make a literature review on the theory of dynamiccapability and the theory of knowledge management, then on the basis of combiningthe characteristics of technology-based SMEs, we put forward that small andmid-sized enterprise’s dynamic capability has five dimensions——environmentalawareness, resources absorptive, internal integration, innovation and apply,refactoring and change. Secondly this paper analyses enterprise knowledgemanagement activities in the process of its dynamic capabilities evolution, and alsoexplore the relationship between organizational learning and knowledge management,then on the basis this analysis,we construct the small and mid-sized enterprise’sorganization learning, knowledge management, and the dynamic capabilities relationmodel and put forward the research hypothesis, then we has carried on the empiricalresearch of the model and proved every hypothesis of this study, and the result showsthat organizational learning can promote knowledge management, then knowledgemanagement has a positive effect on dynamic capabilities, at the same time,organizational learning plays an intermediary role between the knowledgemanagement and dynamic capability. Finally according to the above results we putforward some suggestions to help improve the Tech SEM’s dynamic capabilities. Atthe end of this paper, we summarize the weakness of this research and make anexpectation of the future research.