396 INTERNATIONAL CONFERENCE ON EURASIAN ECONOMIES 2011 The Effect of Information Technology on Innovation Abilities: A Research on SMEs Himmet Karadal (Aksaray University, Turkey) Muhammet Saygın (Aksaray University, Turkey) Abstract The use of information technologies (IT) and increase of innovation activities within Small and Medium Sized Enterprises (SMEs) which can easily adapt to the dynamics and changes can contribute to the regional development process. Though some studies have been concerned about the effect of information technologies or innovation on management performance, it can be easily seen that there has been very little empirical work for Small and Medium Sized Enterprises. Accordingly, the purpose of this study is to analyze the effects of information technologies within Small and Medium Sized Enterprises on innovation (product or process innovation) and management performance. In this study data will be collected through SMEs in Aksaray province and in this way study will deal with the relationship between information technology, innovation and management performance. Data for the research will be collected through survey system. The questions of the survey will be created by using the theoretical and applied literature (validity and reliability tested in various contexts) including information technologies, innovation and performance. Unlike some of the questions taken from previous studies, the new ones will be developed in terms of literature review, recommendations of academic staffs and business managers. The analysis of collected data will be carried out through SPSS package program and by using the techniques of some tests like single sample –t- test and ANOVA test. JEL Codes: O31, O33 1 Introduction The concept of IT has improved its importance in recent years and become indispensable for operational areas as well as management science. IT is affecting not only academic committees, businesses, local authorities and international institutions but also individual users in every aspects of life. The use of information technologies and increase of innovation activities within Small and Medium Sized Enterprises which can easily adapt to the dynamics and changes can contribute to the regional development process. In the world of globalization, information technologies playing the key role of change and actuality are also undertaking the basis of innovation. Organizations dealing with the IT management should tend to innovation efforts and need to work on different models and methods in order to differentiate themselves against global competition. In our globalized world where the growth and development no longer depend on individual factors, the rapid increase of technological improvement reveals the importance of innovation and informatics. The concept of innovation which is both one of the most critical factors of both micro and macro - economic growth and development and providing a competitive advantage has a connection with information systems and its effect in management level occur as a phenomenon emerging in all areas. The use of information technologies and increase of innovation activities within Small and Medium Sized Enterprises should be analyzed. Though some studies have been concerned about the effect of information technologies or innovation on management performance, it can be easily seen that there has been very little empirical work for Small and Medium Sized Enterprises. In this study, use of information system levels within the enterprises located in Aksaray was determined, their innovation capabilities were questioned and the relationship between information and innovation through the management based inferences were indicated. Unlike some of the questions taken from previous studies, the new ones were developed in terms of literature review, recommendations of academic staffs and business managers. The analysis of collected data was carried out through SPSS package program and by using the techniques of some tests like single sample –t- test and ANOVA test. 2 Theoretical Framework Prior to addressing the information technologies, it might be important to mention about the different aspects of data, information, knowledge and wisdom terms. These four concepts of data, information, knowledge and wisdom are fundamental in terms of information technologies and meaning differences among these terms should be identified. Attempts to define these concepts are numerous and produce slightly different results, depending on which discipline is looking at them. Data are defined by dictionaries as factual information used as a basis for reasoning, discussion, or calculation; information as the communication or reception of knowledge; knowledge as the condition of knowing something gained through experience or the condition of apprehending truth or fact through reasoning (Bouthillier and Kathleen, 2002). For Meadow, et al. (2000), data refer to a string