Pooja Rani and Dr. Ajmer Singh, International Journal of Research in Engineering, IT and Social Sciences, ISSN 2250-0588, Impact Factor: 6.565, Volume 09 Issue 02, February 2019, Page 131-136 http://indusedu.org Page 131 This work is licensed under a Creative Commons Attribution 4.0 International License Enhancing Innovation through Knowledge Management Pooja Rani 1 and Dr. Ajmer Singh 2 1 (Research Scholar, CRS University, Jind, Haryana, India) 2 (Faculty, Department of Management Chaudhary Ranbir Singh University, Jind, Haryana, India) We know more than we can tell. — M. Polanyi, 1966 Abstract: Almost from three decades, knowledge management (KM) has been examined by numerous researcher and considered a most important factor in business performance. The purpose of this study was to assess the effect of knowledge management on innovation. It was a review based study and on the basic of literature conclusions have been drown. For literature review, researchers have taken research paper from renowned journals such as EMERALD, ELSEVIER, JSTOR, IEEE, and WILEY publication etc. The finding shows that KM has a significant and consequent influence on innovation. This study contributes mainly to the expansion of the literature on knowledge management and its relationship with innovation. We find out that besides technology and capital, knowledge management is the core component of innovation. Knowledge and creativity are now the major driving forces to achieve competitive edge, crucial to competing in today’s economy. Knowledge management activities are adding value to organizations by promoting Innovation. In the fast changing economy of today, innovation has become the foundation of development. The nature of overall organization development has been changed by the speed of innovation, which can be possible by rapidly developing technology, shorter product life cycles and a higher rate of new product development. Innovation is extremely dependent on the availability and best management of knowledge. Keyword: Knowledge management, Knowledge, Innovation, Business performance. I. INTRODUCTION Organizations have to make sure that their business strategies are innovative to build and sustain competitive advantage. Innovation has become complex due to changing customer needs, immense competitive pressure and flying technological change (Cavusgil et al., 2003). The density of innovation has also been increased by growth in the amount of knowledge available to organizations which are the base for innovation. Innovation is mainly dependent on the availability of knowledge and consequently the difficulty created by the explosion of richness and reach of knowledge has to be recognized and managed to ensure successful innovation (Cardinal et al., 2001; Darroch and McNaughton, 2002; Pyka, 2002; Adams and Lamont, 2003; Shani et al., 2003). Due to the fact that the literature presents very little clarity on this topic, this article tries to clarify the role of knowledge management in innovation. In order to facilitate this, the definition and nature of both knowledge management and innovation has examined. Concept of Knowledge Knowledge has considered one of the most important assets of organizations. It is very important everywhere, whether that is a corporate level or personal level. In these days, it has become the most essential resource in all and how an organization manages its knowledge resource, makes all the difference among organizations. Knowledge is derived from information, information is based on data. Many researchers agree that the first emergence of the hierarchy of information to wisdom was in T.S. Eliot’s poem The Rock in 1934. This poem contains the following lines: Where is the wisdom we have lost in knowledge? Where is the knowledge we have lost in information? T.S. Eliot, "The Rock", 1934. According to Ackoff (1989) data, information, knowledge and understanding are related to past; these categories deal with what has been or what is known. Only wisdom, deal with future because it consists vision and design. With the help of wisdom people can create their future. Ackoff has mentioned understanding in between knowledge and wisdom, he argue that knowledge cannot be convert in wisdom without understanding. Drucker (1994) defined “knowledge is not impersonal, like mo ney. Knowledge does not reside in book, a databank, a software program. Knowledge is always embodied in person; carried by a person; created, augmented, or improved by a person; applied by a person; taught and passed on by a person; used or misused by a person. (p. 210). It is clear that the semantic fields of data, information, knowledge and wisdom are interlaced and overlapping and data has got universal value, but it remains meaningless until it is put to some context. Once the data gets contextualized, it attains meaning and transfers itself into information which can be used in