Innovation has the capacity to improve performance, solve problems, add value

and create competitive advantage for organizations. Innovation can be broadly described as the implementation of both discoveries - inventions and the process by which new outcomes, whether products, systems, processes or organizational forms, come into being (Williams, 1999).

The process of innovation depends heavily on knowledge, particularly since knowledge

represents a realm far deeper than simply that of data, information and conventional logic......

The conceptualization of KM overlaps to some extent with other literatures, including that of

organization learning (Scarbrough and Swan, 2001) and innovation. Many academics on Bussiness and Economics considere that the potential of Knowledge Management (KM) creates the intellectual capital as sources of innovation and renewal, business strategy should be focusing more on these issues.

For Beckman (1999), KM concerns the formalisation of and access to experience, knowledge, and expertise that create new capabilities, enable superior performance, encourage innovation, and enhance customer value.

Coleman (1999) defines KM as an umbrella term for a wide variety of interdependent and interlocking functions consisting of: knowledge creation; knowledge valuation and metrics; knowledge mapping and indexing; knowledge transport, storage and distribution; and knowledge sharing.

And defining knowledge as “information combined with experience, context, interpretation, and reflection” (Davenport et al., 1998)

Knowledge Management (KM) is a relatively new term that encompasses not only the related notions of knowledge transfer and knowledge sharing (externally from other firms to the small firm and/or internally among firm members), but also the knowledge utilization process (Choo and Bontis, 2002; Takeuchi and Nonaka, 2004).

Innovation Management is the discipline of managing processes in innovation. It can be used to develop product, process and organizational innovation. Innovation Management includes a set of tools that allow managers and engineers to cooperate with a common understanding of goals and processes. The focus of innovation management is to allow the organization to respond to an external or internal opportunity, and use its creative efforts to introduce new ideas, processes or products.

About Organizational Learning Stata (1996, p. 318) explains that organizational learning occurs through shared insights, knowledge, and mental models. Thus organizations can learn only as fast as the slowest link learns. Change is blocked unless all of the major decision makers learn together, come to share beliefs and goals, and are committed to take the actions to change. Second, learning builds on past knowledge and experience – that is, on memory. Organizational memory depends on institutional mechanisms (e.g. policies, strategies, and explicit models) used to retain knowledge.

To make innovations is necessary manage knowledge to generate organizational learning to make innovations...