Baltic Journal of Management

Social media as tool for facilitating knowledge creation and innovation in small
and medium enterprises
Armando Papa, Gabriele Santoro, Lia Tirabeni, Filippo Monge,
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Knowledge
Social media as tool for creation and
facilitating knowledge creation innovation
in SMEs
and innovation in small and
medium enterprises
Armando Papa Received 30 April 2017
Revised 26 August 2017
Department of Informatics, University of Turin, Turin, Italy 12 December 2017
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Accepted 2 February 2018

Gabriele Santoro
Department of Management, University of Turin, Turin, Italy
Lia Tirabeni
Department of Cultures, Politics and Society, University of Turin, Turin, Italy, and
Filippo Monge
Department of Economics and Statistics “Cognetti de Martiis”,
University of Turin, Turin, Italy

Abstract
Purpose – The purpose of this paper is to study the effects of social media usage on four knowledge creation
processes, namely socialisation, externalisation, combination and internalisation, and innovation in small and
medium enterprises (SMEs).
Design/methodology/approach – A sample of 96 SMEs has been used to gather data through a
standardised questionnaire and test the hypotheses through OLS regression models.
Findings – The results indicate that social media influence positively three out of four knowledge creation
processes and that they help to foster the innovation process.
Originality/value – From a theoretical perspective, the study contributes to literature considering a specific
digital tool and its effect on knowledge creation and innovation. In fact, a few studies have considered the
impact of social media usage on other variables, such as ROI and productivity, but never on knowledge
creation and innovation through a quantitative study. From a managerial perspective, the research suggests
managers to implement and involve social media within business and innovation processes.
Keywords Innovation, SMEs, Social media, ICT, Co-creation, Knowledge creation
Paper type Research paper

1. Introduction
With the increasing interest in businesses’ collaborative and open approach to innovation,
scholars have started to investigate the enablers and processes useful to acquire and
manage knowledge to increase competitiveness (Del Giudice and Straub, 2011;
Belso-Martínéz et al., 2016; Santoro et al., 2017). In fact, new innovation models suggest
that firms can and should integrate internal and external knowledge in their operations,
creating knowledge through internal departments and acquiring knowledge from external
ecosystems (Chesbrough, 2006; Martinkenaite, 2011; Ritala et al., 2013; Bresciani and
Ferraris, 2016). In the current scenario, social media and their impact on co-creation
innovation is a topic that has been around for years, and evidence in management field
suggests that many companies, especially small and medium enterprises (SMEs), have
struggled to apply a new concept of social product development (Soto-Acosta et al., 2014).
In this regard, a stream of studies indicates that with the technological progress of the last Baltic Journal of Management
decades, new ICT should be implemented in organisational activities to acquire, store © Emerald Publishing Limited
1746-5265
and process information and knowledge that facilitate knowledge creation and DOI 10.1108/BJM-04-2017-0125
 BJM innovation (Malhotra and Majchrzak, 2004; Soto-Acosta and Meroño-Cerdan, 2008;
Murray et al., 2016).
Social media are considered a new form of ICT that involves active content creation
by users and members (Mangold and Faulds, 2009; Goh et al., 2013; Martini et al., 2013)
and through which firms can acquire useful knowledge, conduct marketing activities,
increase sales and deliver customer service, and co-create products and services
(Piller et al., 2012). The impact of social media on the innovative, customer-based
co-creation process is shown in proactive creative and social collaborations between
firms (producers) and users (i.e. virtual consumers), by enabling new product or service
development (Roser et al., 2009). In a context of knowledge-based competition, this
assumption underpins the idea that the customer is the main external source of
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knowledge for innovative firms (Matusik and Hill, 1998; Del Giudice et al., 2013, 2015;
Romano et al., 2014).
Moreover, existing research suggests that SMEs differ from larger firms in terms of
fewer financial, human and technological resources (Brunswicker and Vanhaverbeke, 2015).
In particular, innovative projects which are based to a large extent on external sources of
knowledge and capabilities demand shorter expansion times and require less investment
and more flexibility compared to similar ones based entirely on internal sources of
knowledge (Vrontis et al., 2017). Hence, SMEs find opportunities in user engagement
through social media tools to acquire knowledge and exploit digital ecosystems (Liang and
Turban, 2011; Turban et al., 2011).
Recently, a rich literature has investigated the role and contributions of customers
especially in open innovation processes by emphasising a marketing-driven approach
(Sawhney et al., 2005; Edvardsson et al., 2012; Scuotto et al., 2017c). The growth of social
media engagement among companies shows a shifting from an industrial, customer-based
innovation perspective to a social media, customer-generated one, denoting at the same time
a focus on tools, mechanisms and strategies applied by firms to engage customers and users
with their innovation processes (Prahalad and Ramaswamy, 2004a; Hippel, 2005).
Consistently, some recent studies indicate that SMEs increasingly adopt ICT to exploit
digital ecosystems with customers and business partners (Lopez-Nicolas and Soto-Acosta,
2010; Soto-Acosta et al., 2014; Scuotto et al., 2017a).
Despite such an interest, there is still a gap concerning the role of social media as a
new ICT that fosters knowledge acquisition, knowledge creation and innovation, at least
through quantitative methods. In fact, despite empirical research exploring the changes in
innovation dynamics triggered by social media, the benefits for SMEs of the use of these
digital platforms to acquire the knowledge needed for innovative activities are still
unexplored. Recent studies have measured the benefits of social media usage on financial
performance indicators such as ROI (Scuotto et al., 2017c) and productivity (Scuotto et al.,
2017b). This paper proposes to fill the gap by assessing the impact of social media usage on
knowledge creation and innovation within SMEs, and it addresses this relevant issue by
posing two main research questions:
RQ1. What is the effect of social media usage on knowledge creation in SMEs?
RQ2. What is the effect of social media usage on innovation in SMEs?
To answer these questions, this research took the following steps using the following
methods. First, we reviewed the literature on social media and knowledge creation based on
the knowledge-based theory. Second, we developed hypotheses based on these theoretical
arguments. Third, we applied quantitative methods to test the hypotheses. To do this we
used a questionnaire to gather data from 96 SMEs operating in the food and beverage, ICT
and fashion sectors to build several OLS regression models. Finally, we discuss our findings
to provide theoretical and managerial implications.
 2. Literature review Knowledge
An increasing number of researchers have started to analyse usage of social media within a creation and
business model, by arguing the effects on knowledge management and creation, and innovation
innovation from different points of view. These researchers underline that social media
engagement is increasingly significant in sustaining competitive advantage among firms. in SMEs
Furthermore, studies of social media patterns have become an emerging research trend in
both knowledge and organisational management (Turban and Greening, 1997; Yates and
Paquette, 2011; Chua and Banerjee, 2013), changing the landscape and the ways we
understand the participation of the customer in a proactive innovation process. According
to the principles of service-dominant logic (Vargo and Lusch, 2008) and co-creation practices
(Prahalad and Ramaswamy, 2004b; Campanella et al., 2017; Sandulli et al., 2017), value is
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co-created with customers and innovation is influenced by social forces and relations. This
literature review aims to contextualise and expand the central aspects of social media within
the management field by according them social and knowledge construction perspectives.

2.1 Social media

Firms are facing pressures and opportunities in the current dynamic social, technological
and economic environment. First, it has been asserted that knowledge is the main source of
competitive advantage in today’s knowledge economy (Basly, 2007; Solima et al., 2016).
Moreover, knowledge is widely dispersed in the global environment, and therefore
companies strive to acquire strategic knowledge (Chesbrough, 2006; Chen et al., 2016;
Santoro et al., 2016). Second, the technological progress led by internet and digital tools cuts
the distance between knowledge sources. Accordingly, the attention of scholars has been
devoted to the strategic use of new ICT to acquire and manage knowledge and increase
competitiveness (Soto-Acosta et al., 2014; Del Giudice and Della Peruta, 2016). In many
studies, innovation patterns have been shown to be related to the ability of organisations
to join new sources of knowledge or, alternatively, to connect to previous ones in an
innovative manner (Mansfield, 1986; Ferraris et al., 2017; Santoro et al., 2017). The increasing
involvement of customers in firms’ innovation processes and the decreasing costs of internet
technologies have led to larger investments in ICT within firms (Mangold and Faulds, 2009;
Goh et al., 2013; Martini et al., 2013). Social media have been increasingly used by firms and
people all over the world. They are considered new ICT that involves active content creation
by users and members (Mangold and Faulds, 2009; Goh et al., 2013; Martini et al., 2013) and
through which firms can acquire useful knowledge, conduct marketing activities, increase
sales and deliver customer service, and co-create products and services (Piller et al., 2012;
Bresciani et al., 2016; Scuotto et al., 2017a; Scuotto et al., 2017c).
As a consequence, social media are highly interactive platforms in which individuals,
collectives and businesses constantly interact and communicate in order to share, co-create,
exploit and explore new user-generated innovation opportunities (Kaplan and Haenlein, 2010;
Piller et al., 2012). Examples of social media are Facebook, Twitter, Wikipedia, LinkedIn, Xing,
Google+, Youtube, Vimeo, Picasa, Flickr. Companies’ online forums can be also considered
social media, where customers discuss products and services. In the last several years, firms
have increasingly deployed these tools to improve operations, collaborations and knowledge
sharing with customers and other external actors. At the same time, technological facilities
draw on the social media conversation of the firms, enabling virtual platforms via ICT and
new fields of application in social media based on the usage of mobile data and the fast
adoption of smartphones. In this way, firms find value in the knowledge obtained, improving
processes and products or services (Remondino and Bresciani, 2011). In fact, these
technological and digital tools have a twofold objective. On one hand, they foster marketing,
advertising and branding activities in order to increase sales (Culnan et al., 2010), which can be
considered as a variable for user-firms to evaluate customer engagement (Love et al., 2011).
 BJM On the other hand, firms are increasingly conscious that social media can be used as strategic
platforms to engage users in the idea generation process (Füller and Matzler, 2007).
For instance, LinkedIn, Facebook, and YouTube have facilitated relationships between SMEs
and users, thanks to the growth in interactive communication one to million users over the
past few years (Moital et al., 2009; Piller et al., 2012; Dijkmans et al., 2015; Leung et al., 2015).
Accordingly, social media are recognised as a driver to the generation of new ideas
(Chesbrough, 2011; Love et al., 2011; Mount and Martinez, 2014).
Similarly, according to Piller et al. (2012), social media can be used by firms to conduct
marketing activities, increase sales, deliver customer service and assist in the co-creation of
new products.
For example, Starbucks created a platform where customers can share feedback, discuss
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offerings, and generate new ideas useful for the management of the firm (Gallaugher and
Ransbotham, 2010). Another example is Barilla, an Italian firm operating in the food industry.
Barilla developed a platform allowing customers to submit ideas about products and discuss
ideas provided by others, again developing innovative ideas through customer engagement
and user-generated content (Tussyadiah and Zach, 2013). Finally, it is well-known that Procter
& Gamble increases its co-creation value through the Connect + Develop programme,
according to which people all over the world can contribute to product development by
responding to the firm’s call to address several problems.
However, these are spot examples, and large sample studies providing evidences on the
link between social media, knowledge creation and innovation are missing in the literature.
The next section develops hypotheses regarding the relationship among these variables.

2.2 Hypothesis development

Based on the impact of social media usage on firm-customer relationships, we could posit
the effects of cooperation and co-creation, where user-generated contributions foster a
co-evolutionary generation stage of innovation performance. Prior to this development, the
knowledge-based theory of the firm suggested that organisations are knowledge systems
based on four main knowledge management processes: knowledge creation, knowledge
storage, knowledge transfer and knowledge application (Holzner and Marx, 1979; Pentland,
1995; Sharkie, 2003). This paper focusses on knowledge creation as a process that involves
the development of new contents or replacement of existing contents within organisational
knowledge (Alavi and Leidner, 2001; Roth, 2003; Erden et al., 2008). Accordingly, new
knowledge is created through processes of conversion of tacit and explicit knowledge
(Geisler, 2009), which expand both tacit and explicit knowledge in quality and quantity
(Nonaka et al., 2000), thus increasing the amount of strategic intangible resources at firm’s
disposal (Dezi, 1996; Calza et al., 2014). Therefore, knowledge itself comes in different forms,
and the main distinction is between explicit and tacit knowledge (Polanyi, 1967). The first
regards knowledge that is transmittable in formal and systematic language. The latter
concerns the personal skills of employees and is, therefore, more problematic to codify and
imitate (Barney, 1991; Easterby-Smith and Prieto, 2008).
Four modes of knowledge creation have been identified by Nonaka and Takeuchi (1995).
Socialisation regards the conversion of tacit knowledge to new tacit knowledge through social
interactions and shared experience among organisational members. Combination concerns the
creation of new explicit knowledge by merging, categorising, reclassifying, and synthesising
existing explicit knowledge. Externalisation refers to codifying tacit knowledge into explicit
knowledge. Internalisation refers to embodying explicit knowledge into tacit knowledge, such
as understanding results from discussions or readings. With respect to this, our central
assumption emphasises how the rise of social media heavily affects the innovation process by
acting as game changer of the customer-firm relationship due to knowledge creation and
sharing conversation.
 As anticipated, social media are tools that allow information and knowledge exchange Knowledge
between firms and customers from remote places (Scuotto et al., 2017a; Scuotto et al., 2017b, c). creation and
The literature also argues that knowledge needs to be captured, stored and shared through innovation
ICT to involve customers and sources dispersed geographically (Lopez-Nicolas and
Soto-Acosta, 2010; Santoro et al., 2017). in SMEs
In general, thus, new ICTs are seen as facilitators of knowledge management and
knowledge creation (Lopez-Nicolas and Soto-Acosta, 2010; Scuotto et al., 2017a). Technology
offers opportunities for enhancing strategic learning (Thomas et al., 2001). For example,
Lopez-Nicolas and Soto-Acosta (2010) pose that ICT use orientation enable knowledge
creation processes, helping in sharing tacit knowledge among employees (socialisation),
translating tacit knowledge in a more explicit and systematic form (externalisation),
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systemising concepts into a knowledge system (combination), and facilitating conversations

and discussions thus embodying explicit knowledge into tacit knowledge (internalisation).
Within ICT, social media cover a key role in capturing and creating new knowledge, through
higher levels of exposure and online information traffic (Stelzner, 2013). The interactions
allowed by social media create the basis for organisational learning and knowledge creation
(Chou and He, 2004), with regard to both tacit and explicit knowledge (Yates and Paquette,
2011). For these reason, it is reasonable to infer that social media may affect all the four
knowledge creation processes proposed by Nonaka and Takeuchi (1995).
In line with these arguments, social media are likely to be a virtual ecosystem where
firms and customers interact by sharing information and knowledge, collaborating and
discussing common interests (Piller et al., 2012), stimulating socialisation, externalisation,
combination and internalisation processes within firms. Wagner et al. (2014) suggest
that social media may sustain knowledge creation by affording new types of behaviours
that were not possible with previous forms of ICT. However, that study is conceptual and
empirical evidences of the direct relationship between social media and knowledge creation
are still missing.
Following these points, the benefits derived from social media, which include efficient
information and knowledge sharing as well as working without distance limits, are expected
to be positively related to the four modes of knowledge creation:
H1. Social media usage is positively associated with socialisation in SMEs.
H2. Social media usage is positively associated with externalisation in SMEs.
H3. Social media usage is positively associated with combination in SMEs.
H4. Social media usage is positively associated with internalisation in SMEs.
Once that knowledge is created, firms are more likely to be innovative, because knowledge
is the key resource to develop innovations (Darroch, 2003, 2005). In fact, the virtual
environment, driven by social media, allows the acquisition and creation of knowledge
useful to modify existing products or develop new ones (Kim, 2004). Accordingly, social
media facilitate firms’ capacity for innovation by simplifying coordinated actions and
knowledge flows (Scuotto et al., 2017a). Furthermore, it is acknowledged that social media
foster marketing and commercial activities and therefore they are more likely to increase
sales of new products, improving innovation performance (Piller et al., 2012). For example,
Sawhney et al. (2005), through two case studies, indicate how social media can facilitate
collaborative innovation at different stages of the new product development process and for
differing levels of customer involvement (high reach vs high richness).
In sum, social media appear to be perfect tools to influence current and potential
consumers (Hanna et al., 2011) and increase innovation (Chalkiti and Sigala, 2008; Sigala and
Chalkiti, 2007), in terms of incremental changes to existing products or creation of radical
new products.
 BJM For these reasons, we posit that:
H5. social media usage is positively associated with innovation in SMEs.

3. Methodology
3.1 Research design, sample selection and data source
The purpose of this paper is to study the effects of social media usage on knowledge creation
processes and innovation in SMEs. To do so, we employed a quantitative methodology
involving a sample of Italian firms operating in different sectors ( food and beverage, ICT and
fashion). The quantitative methodology has been chosen due to the nature of the topic, which
calls for more fine-grained approaches to explore relationships among variables. Moreover,
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this approach is widely used in this field (Ferraris et al., 2017; Santoro et al., 2017).
The research is based on a survey methodology, which is useful to enhance the
generalisation of results (Dooley, 2001). As a first step, a conceptual model developing
hypotheses has been proposed in the previous section. Then, the quantitative study aims at
testing the hypotheses to give an answer to the research questions. To reach this goal,
500 SMEs operating in food and beverage, fashion and ICT sectors have been randomly
selected from the Italian database AIDA-Bureau van Dijk. We used a standardised
questionnaire to collect data, sent by e-mail to all key decision makers (i.e. the founder or
managing director) of these SMEs; if no e-mail address was provided, they were approached
through a telephone call. SMEs were selected as the appropriate business form for this
research (Spithoven et al., 2013) because the majority of firms in Italy are SMEs (Annual
Report on European SMEs, 2016). Moreover, Italy is a country well suited for this research,
given that internet traffic and social media usage are very strong (We are social, 2017).
The questionnaire was developed according to the previously discussed literature and
sent with a brief introduction explaining the scope of the research. It is divided in two parts,
with both open and closed questions. The first part investigates general information about
the firm, such as industry, number of employees, age, and innovative, financial and
economic performance. The second part investigates specifically approaches to innovation,
social media usage and knowledge creation.
The single questions have been separated in order to reduce the risk of rationalising the
answers of the respondents. Moreover, we placed dependent and independent variables in
different positions within the questionnaire to limit potential common method variance. Data
were processed through ordinary least square (OLS) procedures, in line with previous studies
(Lichtenthaler, 2009; Chiang and Hung, 2010; Parida et al., 2012).
The final sample is composed of 96 SMEs operating in different sectors in order to have
heterogeneous firms in our analyses. In particular, we chose firms operating in the food and
beverage, ICT and fashion sectors because they tend to adopt social media for several
reasons, among them marketing, advertising and co-creation processes. The firms are all
SMEs and the majority have fewer than 50 employees.
The response rate was 18.6 per cent. SMEs are distributed across Italy, though the
majority operate in the north of the country. More details about the sample are provided
in Table I.

Sector name n % Number of employees n %

Food and beverage 33 34 1-9 12 13

ICT 38 40 10-49 52 54
Table I. Fashion 25 26 50-249 32 33
Sample characteristics Total 96 100 Total 96 100
 3.2 Variables Knowledge
To answer our research questions, we used two different dependent variables. The first, creation and
innovation performance, is taken from previous studies in innovation management, and is innovation
calculated by using the percentage of sales from new or significantly improved products
and services compared to total sales of the firm (Laursen and Salter, 2006; Brunswicker and in SMEs
Vanhaverbeke, 2015; Chen et al., 2016).
The second dependent variable regards knowledge creation. We used scales proposed
by Lee and Choi (2003) and also by Lopez-Nicolas and Soto-Acosta (2010). We used
19 items to measure the four knowledge creation variables, namely, socialisation,
externalisation, combination and internalisation, through a seven-point Likert scale.
Therefore, it is important to note that the second dependent variable (knowledge creation)
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has been split in four sub-variables. This will help to shed light on the specific knowledge
creation processes. Table AI shows the Cronbach’s α values for each knowledge
creation process, which are higher than the recommended threshold (Santos, 1999) for
socialisation, externalisation and combination, and sufficient for internalisation. As a
consequence, we used the average values of the answers obtained for each knowledge
creation process (Table AI).
Based on previous studies, we conceptualised social media variables through the
seven-point Likert scale addressing questions regarding social media usage, social platform
usage and social media capabilities (Boyd and Ellison, 2008; Scuotto et al., 2017a). We used
the average value because the Cronbach’s α value is 0.76.
Finally, we controlled for several variables that can influence the other variables and the
analyses. First, the size of the firm can affect the digital resources possessed and knowledge
creation processes (Dewar and Dutton, 1986). The number of employees represents the firm
size. Second, the age of the firm, namely the number of years since founding, is included in
the models (Huergo and Jaumandreu, 2004). Third, we controlled for R&D intensity,
calculated as the share of investments in R&D to total revenues for the year, given that it
could affect knowledge creation and innovation within firms (Cohen and Levinthal, 1989;
Bresciani et al., 2015) (Table II).

4. Results
Descriptive statistics show that the firms in the sample are small (the average number of
employees is 43), do not spend a lot on internal R&D (5 per cent), but they are rather
innovative (31 per cent of revenues comes from new products and services). Then, the firms
in the sample involve social media in their business processes (5.45 out of 7) and they are
active in knowledge creation, as shown in Table III.

Size Age R&D SM SOC EXT COMB INT Innovation

Size 1 0.071 0.398** 0.485** 0.293** 0.093 0.168 −0.047 0.178

Age 0.071 1 0.024 −0.017 0.026 0.021 0.012 0.146 −0.125
R&D 0.398** 0.024 1 0.563** 0.631** 0.503** 0.501** 0.443** 0.247*
SM 0.485** −0.017 0.563** 1 0.794** 0.605** 0.623** 0.181 0.459**
SOC 0.293** 0.026 0.631** 0.794** 1 0.715** 0.820** 0.517** 0.234*
EXT 0.093 0.021 0.503** 0.605** 0.715** 1 0.466** 0.290** 0.355**
COMB 0.168 0.012 0.501** 0.623** 0.820** 0.466** 1 0.488** 0.189
INT −0.047 0.146 0.443** 0.181 0.517** 0.290** 0.488** 1 −0.002
Innovation 0.178 −0.125 0.247* 0.459** 0.234* 0.355** 0.189 −0.002 1 Table II.
Notes: *p o0.05; **p o 0.01 Correlation matrix
 BJM n Min. Max. Mean SD

Size 96 5.00 180.00 43.7708 29.70645

Age 96 4.00 82.00 28.6667 18.56974
R&D 96 0.00 0.18 0.0533 0.05342
Innovation 96 0.00 0.82 0.3142 0.17712
Social media 96 4.00 7.00 5.4549 0.86128
Socialisation 96 4.40 6.40 5.0833 0.49474
Externalisation 96 4.80 6.00 5.1563 0.41162
Table III. Combination 96 4.60 6.20 5.1458 0.44625
Descriptive statistics Internalisation 96 4.75 6.00 5.2552 0.41196
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To answer the research questions, we tested our hypotheses using OLS regression analysis
and the results are presented in Table IV. We developed five models that test the direct
effect of social media on different dependent variables, therefore testing the hypotheses.
Model 1 has an R² of 0.70 (the adjusted R² is 0.69) and an F-value of 54.15 (Po0.001).
Model 2 has an R² of 0.48 (the adjusted R² is 0.46) and an F-value of 20.89 (Po0.001).
Model 3 has an R² of 0.46 (the adjusted R² is 0.43) and an F-value of 19.24 (Po0.001).
Model 4 has an R² of 0.28 (the adjusted R² is 0.25) and an F-value of 8.80 (P o0.001). Model 5
has an R² of 0.23 (the adjusted R² is 0.19) and an F-value of 6.63 (P o0.001).
In detail, model 1 tests the effect of social media on socialisation, which is positive and
significant (0.711; p o0.001), confirming H1. Model 2 tests the effect of social media on
externalisation, which is positive and significant (0.594; p o0.001), confirming H2. Model 3
tests the effect of social media on combination, which is positive and significant (0.586;
p o0.001), confirming H3. Model 4 tests the effect of social media on internalisation, which
is positive but nonsignificant (0.015; p W0.05), thus not confirming H4. Finally, Model 5 tests
the effect of social media on innovation, which is positive and significant (0.480; p o0.001),
confirming H5. Our results therefore suggest that social media influence 3 out of 4
knowledge creation processes and influence innovation within firms. Considering
knowledge creation, our models indicate that size and R&D intensity have a significant
effect as control variables. In detail, size affects knowledge creation negatively, as shown in
Models 1, 2 and 3, while R&D intensity affects knowledge creation positively. Finally, the
last model indicates that the control variables do not affect innovation.

5. Concluding discussion
5.1 Discussion of the findings
The main purpose of the paper was to investigate effects of social media usage on
knowledge creation and innovation within SMEs. We have provided empirical evidences of

Socialisation Externalisation Combination Internalisation Innovation

Variable Model 1 Model 2 Model 3 Model 4 Model 5

Social media 0.711 (0.211)*** 0.594 (0.047)*** 0.586 (0.052)*** 0.015 (0.055) 0.480 (0.024)***
Size −0.174 (0.001)** −0.315 (0.001)** −0.222 (0.001)* −0.282 (0.001) −0.046 (0.001)
Age 0.043 (0.002) 0.047 (0.002) 0.031 (0.002) 0.154 (0.002) −0.113 (0.001)
R&D 0.299 (0.649)*** 0.294 (0.717)** 0.259 (0.792)** 0.543 (0.843) −0.002 (0.649)
R² 0.704 0.479 0.458 0.279 0.226
Table IV. Adjusted R² 0.691 0.456 0.434 0.247 0.192
OLS regression F-value 54.150*** 20.884*** 19.240*** 8.805*** 6.633***
models Notes: Standard deviation in parentheses. *p o0.05; **p o0.01; ***p o0.001
 the impact of social media in knowledge management and innovation processes according a Knowledge
user co-creation-driven approach. As we have stated theoretically, social media may creation and
intensify the efficiency and efficacy of the innovation process through knowledge creation innovation
by lowering the risk of negative spillover and, simultaneously, by augmenting knowledge
stocks in the social media partnership, which is considered a core asset value for success in in SMEs
innovation (Piller et al., 2012; Scuotto et al., 2017a). Beyond these considerations, literature
suggests that with technological progress, led by the internet, new ICT can be used by firms
to manage knowledge properly and exploit knowledge in innovative ways (Lopez-Nicolas
and Soto-Acosta, 2010; Del Giudice and Della Peruta, 2016). Despite these indications, few
studies have considered the role of social media in knowledge creation and innovation.
Recent studies have assessed the role of social media in enhancing ROI and productivity
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(Scuotto et al., 2017b, c), but knowledge creation and innovation have been quite neglected,
especially by quantitative studies. We therefore contribute to the literature by evaluating
the impact of social media on the above-mentioned variables applying quantitative methods.
With regard to our first research question, our results suggest that social media
stimulate knowledge creation, at least through the socialisation, externalisation and
combination processes. These results are similar to those of Davenport and Prusak (1998)
and Lopez-Nicolas and Soto-Acosta (2010), which found positive effects of ICT on
knowledge creation. However, we found no significant effects on the internalisation process.
Future studies could address this finding by investigating differences among specific
knowledge creation processes.
Moreover, our results empirically tested what previous studies indicated theoretically,
namely that social media are important drivers of innovation for firms, because companies
gather data about customers and their needs (Piller et al., 2012; Martini et al., 2013; Scuotto
et al., 2017a). In fact, our regression models indicate that social media are positively and
significantly associated with innovation. This is because social media enable firms to exploit
social communities, gathering relevant knowledge and translating knowledge into new
knowledge, stimulating innovation (Inkinen et al., 2015). Moreover, social media may
enhance co-creation processes by allowing a large number of participants and communities
to enter the firm’s innovation processes, augmenting the heterogeneity of its knowledge
(Laursen and Salter, 2006; Piller et al., 2012; Ferraris et al., 2017).
Finally, social media provide market-based knowledge that is extremely explicit and
usefully exploited for specific innovative projects.
Taken together, these findings highlight the contribution of the paper. In detail, it
bridges two previously unconnected literatures (social media/ICT and knowledge creation)
and, in doing so, provides an innovative perspective on how social media and their
affordances may support knowledge creation and in turn, innovation processes.

5.2 Practical implications, limitations and future research

The results of this research allow us to provide some interesting managerial implications.
From the analyses, it emerges that there is a need for SMEs operating in the fashion, food
and beverage and ICT sectors to implement social media scanning ideas and knowledge
from the external environment. It is well-known that fashion, food and beverage, and ICT
firms must develop and commercialise new products with steady pace to compete in the
market. This is due to the shortening of the life cycle of products and services and for the
increasing competition in international markets. In this way, these firms are pushed to
increase the openness of the innovation boundaries looking at ideas provided by the
external environment, which underpins the idea that information and knowledge are
globally distributed.
Particularly, ideas and knowledge from customers through social media seem to
stimulate knowledge creation among firm’s employees and innovation. In this regard, the
 BJM application of social media for knowledge creation could offer plenty of opportunities to
build specific capabilities and scripts that help SMEs to identify, at an organisational level,
routines, tools and practices useful to sustain business process reorganisation during the
implementation of customer-side innovation initiatives. SMEs have to cultivate a digital
culture and favour the social media manager figure within the organisation. However,
despite these positive views of social media, SMEs have to reorganise their structures to
manage digital tools properly. In fact, the social media manager must be able to work with
R&D departments and knowledge workers by translating relevant knowledge gathered
from online ecosystems. This addresses the question of how the internal sources
of knowledge have to be adjusted in order to allow optimal use of these external sources of
innovation processes. In this view, firm’s absorptive capacity must shift its roles through a
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digitisation process involving capacities to use technologies and gather relevant and smart
data from them.
Finally, we have to consider that knowledge co-creation with customers active in social
media is booming. We therefore suggest that managers use more social media in their
business activities because social media are tools that do not require large investments, and
they are rather easy to implement and use. A substantial “social media crowd” surely adds a
new level to a firm’s competitiveness in knowledge and creativity, and may be enough to
explain a switch to democratic and social innovation, where the role of “custopreneurs”[1]
could become a fascinating field for future research in the management field.
This research, of course, has limitations. First, despite the appropriateness of the
methodology involved, a quantitative study can overlook questions such as “how” and
“why” social media managers can or should search for ideas and knowledge from online
platforms. Therefore, qualitative studies are needed in this regard. Second, our research
focussed on SMEs in a specific country. Results from a different context could be different.
Finally, as anticipated, future studies should address the issue concerning activities and
practices to augment the benefit from social media, by looking to moderating variables on
the relationship between social media and knowledge creation and/or innovation, both in
SMEs and large enterprises. In this guise, employees must organise the usage of social
media in such a way to extrapolate and exploit relevant knowledge to stimulate knowledge
creation and innovation.

Note
1. Custopreneurs is a portmanteau word coined by the authors to underline the new entrepreneurial
role that the costumer assumes in co-creating of innovation. It represents a combination of the
words “CUSTOmer” and “entrePRENEUR”.

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 BJM Appendix

Variable Questions Cronbach’s α

Socialisation The importance of gathering information from sales and production sites 0.923
The importance of sharing experience with suppliers and customers
The importance of engaging in dialogue with competitors
The importance of finding new strategies and market opportunities by
wandering inside the firm
The importance of creating a work environment that allows peers to
understand the craftsmanship and expertise of one another
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Externalisation The importance of creative and essential dialogue 0.848

The importance of the use of deductive and inductive thinking
The importance of the use of metaphors in dialogue for concept creation
The importance of exchanging various ideas through dialogue
The importance of subjective opinions
Combination The importance of planning strategies using published literature, computer 0.755
simulation and forecasting
The importance of creating manuals and documents on products and
services
The importance of building databases on products and services
The importance of building up materials by gathering management figures
and technical information
The importance of transmitting newly created concepts
Internalisation The importance of enactive liaising activities with functional departments 0.670
by cross-functional development teams
The importance of forming teams as a model, and of conducting
experiments and sharing results with entire departments
Table AI. The importance of searching for and sharing new values and thoughts
Knowledge creation The importance of sharing and trying to understand management’s vision
variables through communication with colleagues

Corresponding author
Gabriele Santoro can be contacted at: [email protected]

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