The Role of Knowledge Processing Management in SME Development and Economic Growth

Small and medium enterprises (SMEs) contribute to economic development by virtue of their employers’ numbers and increasing share in Gross National Product (GNP). SMEs strengthen the resilience of the countries to face a competitive and challenging global environment. A large body of investigations has been done on the identification of factors which facilitate the creation or development of SMEs. One of the most important factors which affect the creation and development of SMEs is individuals’ information processing. In this study, by using a theoretical model, authors tried to determine the role of knowledge processing in recognizing those opportunities which lead to SME creation and development. Based on Olson’s theory (1985), authors considered two moods for cognitions styles which affect knowledge processing in entrepreneurs and lead to SME creation: intuition versus analysis and the result of factor analysis showed that opportunities are both born and created but not by accident, authors found those entrepreneurs who develop and create SMEs have special characteristics in recognizing and processing the information. They can process the business related information much faster than typical people. This ability allows them to turn their knowledge into a large endowment of assets which form a new SME or extend an existing one.