The impact of knowledge management on innovation and entrepreneurship in the biotechnology and telecommunications industries Daniel Palacios Ignacio Gil Fernando Garrigos Accepted: 15 September 2008 / Published online: 15 October 2008 Ó Springer Science+Business Media, LLC. 2008 Abstract In the resource-based view approach, the knowledge frontier rests on the understanding of the process of creating and recreating distinctive compe- tences. Moreover, in spite of the importance of knowledge assets, how innovation distinctive com- petences are generated in organizations is still an unknown factor. This research studies the effect of introducing knowledge management programs in the development of innovation distinctive competences, using two knowledge intensive industries. We estab- lish a conceptual delimitation of knowledge management as a directive system through a set of principles and practices. The theoretical relationships we propose are tested in an empirical study carried out in 222 firms from the Spanish biotechnology and telecommunications industries. Keywords Knowledge management Á Innovation Á Distinctive competences Á Entrepreneurship Á Knowledge intensive industries JEL Classifications L26 1 Introduction The study of the process of generation and regeneration of distinctive competences in the firm constitutes a relevant problem. Knowledge on organizational actions and decisions that allow for the development and renewal of the strategic assets portfolio in an organization still lacks a satisfactory structure (Hegde and Shapira 2007; McEvily and Marcus 2005; Ranft and Lord 2002; Zollo and Winter 2002). The aim of this research is to analyze how the introduction of knowl- edge management (KM) systems allows for the generation of distinctive competences based on inno- vation, in order to create lasting abnormal results. Our interest lies in how KM might influence the acquisition and generation of competences and how it leads to obtaining economic profits. This problem is more closely related to dynamic approaches of the resource- based view (RBV), which focuses on explaining how distinctive competences are created, developed and accumulated. Present research lines study the relationship between innovation and entrepreneurs (Ma´s-Verdu´ 2007; Drucker 1985; Mazzarol and Reboud, 2006). From the resource perspective, novelty in the economy is gener- ated principally through resource recombination, and the principal agents who accomplish these recombina- tions are entrepreneurs (Wong et al. 2005). Schumpeter (1934) had the clearest possible conception that it was entrepreneurship that created new lines of development within an economy, in ways that could not be anticipated D. Palacios (&) Á I. Gil Á F. Garrigos Universidad Polite´cnica Valencia, Valencia, Spain e-mail: dapamar@doe.upv.es 123 Small Bus Econ (2009) 32:291–301 DOI 10.1007/s11187-008-9146-6