Does Innovation Matter? The Effect of Knowledge Management a Comparison Study of Taiwan's Two Industries

The relationship between knowledge management and innovation is very important to business all over the world. However, without good practices of knowledge management, one organization can't increase innovation. This study tries to figure out the relationships between knowledge management and innovation based on Common Wealth Magazine's Top 1000 manufacturers and Top 100 financial firms in Taiwan 2007. The result reveals that knowledge management is related to innovation. But, by regression analysis, the figures show that there are some differences in information technology manufactures and financial firms. Knowledge management indeed affects innovation. Therefore, the implementation of knowledge management will increase innovation. Some implications and suggestions are provided in paper.