Knowledge Management Process and Innovation Capabilities in the Software Engineering Sector in Sri Lanka

A number of technological developments, including those in the areas of artificial intelligence, machine learning, and the internet of things, have contributed to the fast expansion of software engineering. It is essential for businesses to have this sector since it makes it possible to automate processes, reduces expenses, and enhances customer satisfaction by connecting different capabilities. There will be 28.7 million software engineers working around the globe by the year 2024. By the year 2027, it is anticipated that the market would have reached a total value of $1039 million. On the other hand, the imbalance between supply and demand in the sector is the primary factor that is driving the need for outsourcing solutions. The sector is currently confronted with significant challenges that are associated with capacity, information sharing, and priority problems. Software engineers in Sri Lanka have difficulties in locating developers with the necessary skills and in adjusting to the quickly changing technical environment. It is vital that the industry shift its focus from providing services to manufacturing tangible items in order to achieve growth and generate positive cash flows. An empirical investigation was undertaken to examine the correlation between knowledge management and innovation capabilities in the software engineering industry of Sri Lanka. The findings demonstrated a robust and affirmative association between the capacity for innovation and the processes of generating, disseminating, and implementing knowledge. The regression model showed that knowledge creation, transfer, and application are influenced by innovation capabilities, with 86% of the variance of innovation capabilities being attributed to these factors.