China Knowledge Enterprises

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Knowledge Creation by SMEs on Communities of Practice

Small and Medium-sized enterprises (SMEs) turn to be a driving force of economic development in China; by facing the global competition, to gain unique capabilities are the keys for Small and Medium-sized enterprises in China to survive and grow. These unique capabilities are created by managing knowledge. Within Knowledge Management, knowledge sharing and learning are the premises for knowledge creation. Therefore, it is important to find places which produce unique capabilities by knowledge activities for Small and Medium-sized enterprises in China. The relationship between knowledge activities and knowledge creation were studied in this thesis. This thesis researches knowledge activities of Chinese Small and medium enterprises on Communities of Practice on Business to Business channel, and aims to find solutions for Chinese Small and Medium-sized enterprises building competitive advantage.

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The current thesis explores the necessary conditions for sustainable knowledge sharing and learning; and analyzes the relationship between intangible assets with competitive advantage based on theoretical background. By observing the environment of Communities of Practice on, it shows sustainability about knowledge sharing and learning; knowledge sharing and learning create intangibles assets on Communities of Practice on; and those intangible assets result in competitive advantage. Practices were examined by combining with theoretical definitions and a survey was carried out to examine the hypothesis.


This literature part examines the theoretical background related to knowledge, knowledge management and strategic competencies. Following the relationship between knowledge management, intangibles assets and competitive advantage is explored and a hypothesis is conducted.

  • Knowledge

Society is on the transition from previous industrial economy to information economy, and towards knowledge-based economy today. Over last decades, large companies were stronger for holding more capitals, more skills, more hi-tech than small and medium enterprises. Because large companies could invest largely on high-tech machineries, information and communication technology, efficient production designing and so on, this could lower production cost and increase production efficiency and resulted in considerable returns for them. While Small and Medium-sized enterprises were in disadvantage of lack of capitals, human resources or operation resources, the inability caused Small and Medium-sized enterprises at low tide in the past. Today, it becomes increasingly difficult for large companies to adapt to changing environment, due to strategies that are towards product-market and systems that are mechanically operated. The unstable environment compels large companies to rethink and redesign the whole systems and strategies; which make them, unprepared about the threat. On the contrary, Small and Medium-sized enterprises turn to be more flexible and smarter. When they are facing changes, there is no need to re-allocate the whole system like large companies. They may not even have a normative system, due to limited capability of expenditure. As time passes,

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