Abstract – Knowledge management (KM) initiatives on innovation and product quality have developed a whole new level of strategy and competitive advantage for many industries. However, researchers believe that although employee motivation in knowledge sharing is important, it becomes a neglected issue. The key issue here is that employees should realize that KM initiatives are linked very strongly to new product development (NPD). KM involves creativity and knowledge creation which are both important factors when it comes to addressing concerns connected with the product life cycle during the design phase. Therefore, the aim of this study is to examine the importance of KM in NPD with a special emphasis on facets such as creativity and product development performance seeing as these two factors are specified at the design stage of a product life cycle. For this study, a survey analysis was carried out and analyzed using multiple linear regression analysis. Keywords – Creativity, design, knowledge management, new product development, strategy I. INTRODUCTION In the expansion of new industries today, initiatives that drive knowledge-based competitions intensify the significance of boundary spanning activities and strategic partnerships which cause companies to emphasize more on institutional knowledge, system improvements and knowledge management (KM) [1]. From a strategic viewpoint, companies face difficulties in managing resources, policies and the improvement of available KM resources for sustainable innovations [2]. Thus, the dominance of knowledge management as a sustainable competitive advantage for many industries is clearly well acknowledged and requires serious attention especially when it comes to organizing project resources. Liu, Chen and Tsai [3] posit that companies with superior KM practices are capable of improving their new product development (NPD) performance. They also suggest that communities of practice enable engineers to employ continuous improvements and develop new products and processes. This allows communities of practice to form a useful platform for technology and knowledge management. Apparently, the ability and flexibility of KM practices increases the efficiency and speed for NPD in engineering projects. However, Schmickl and Kieser [4] suggest that knowledge conversions among experts are rigorous within very new developments as compared to existing developments. They continue to explain that innovative co-dependence results in modification methods which involve additional unavailable information in NPD teams. In other words, creativity which is a vital ingredient in NPD and design can be jeopardized if the knowledge within a team or company is not properly managed due to the stringent and rigid processes in a product development phase. Concerning the applications of knowledge management, Gardoni and Dudezert [5] posit that KM systems have been developed in engineering design activities so as to advance the productivity of these activities. Nevertheless, they found that identifying the influences of these systems in the engineering design performance is complicated due to a lack of creativity among NPD teams. Hence, although the importance of KM in the areas of product development performance is understood, there is still much room for researchers to understand how KM can aid the creative aspect of product development performance. In recent years, many countries such as Malaysia for instance, have made the move towards a knowledge- based society and economy their primary national development goal [6]. The study on possible obstructions of KM initiatives in improving product development performance is important to develop Malaysian manufacturing firms and help them sustain with Malaysia’s growth, both economically and technologically [7]. However, many firms argue that they are implementing KM but few were successful because there has been a missing link between knowledge management implementations and performance outcomes such as creativity and product development performance [8]. From the aforementioned findings, very few studies have been conducted on the factors that promote or impede creativity and product development performance in the companies of developing countries such as Malaysia. Few studies have been carried out on the systemic affects of industrial practices such as KM on creative product development in companies today. Hence, the main objective of this paper is to investigate the importance of KM in creative NPD with an emphasis on creativity and product development performance in the context of a semiconductor manufacturing company in Malaysia. In this quantitative survey-based study, variables will be used to develop a hypothetical model. The sub-variables for KM can be sub-categorized into socialization, externalization, combination and internalization (SECI). Using multiple linear regression analysis, the sub-variables of the SECI A Case Study on the Importance of Knowledge Management in Creative Product Development P. K. Ng 1 , N. I. Anuar 2 1 Faculty of Engineering and Technology, Multimedia University, Malacca, Malaysia 2 Centre for Diploma Programmes, Multimedia University, Malacca, Malaysia ( 1 pkng@mmu.edu.my, 2 nurulizah.anuar@mmu.edu.my) 978-1-4577-0739-1/11/$26.00 ©2011 IEEE 669