Author(s): Nagwan AlQershi, Zakaria Bin Abas, Sany Sanuri Mohd Mokhtar
Intellectual capital (IC) is now the primary factor for value creation and competitive advantage among firms. Also Strategic Innovation (SI) may contribute to increased operational effectiveness and efficiency; it is, therefore, reasonable to say that consistent strategic innovation would lead to exploring new marketing methods and improving customer satisfaction to meet their changing needs. However the current study fills the existing gaps in theory and practice by investigating the nature of the relationship between intellectual capital and SMEs’ strategic innovation in the manufacturing industry of Yemen. The survey method was used to collect data from 284 SMEs in the manufacturing industry of Yemen. Results indicate that intellectual capital dimensions have a significant effect on strategic innovation. This is the first statistical study to demonstrate the influence of intellectual capital and strategic innovation in manufacturing SMEs in Yemen, Middle East and developing counties. Our finding may help owners in enhancing intellectual capital in order to achieve higher strategic innovation effectiveness and efficiency.