Innovation as a mediator of knowledge combination capability and firm performance

Innovation is inseparable from growth and survival as a vital component of a firm's strategy when it comes to building competitive advantage. There are several reasons for this, such as to implement a more productive manufacturing process, to perform better in the market, to improve customer perceptions and to gain a sustainable competitive advantage. There are four types of innovation: product innovation, process innovation, marketing innovation and organisational innovation. The process of innovation and product innovation in this case acts as a mediator between the ability of a combination of knowledge and performance. The aim of this research was to study the potential of product and process innovation as a mediator in the knowledge combination capability on company performance. The study found that companies need to pay attention to knowledge combination capability, which can contribute to overcoming the lack of resources in MSMEs. The intended knowledge is related to employee knowledge, ideas and information about customer behaviour and organisational needs. This means that the combination of knowledge has a positive effect on process and product innovation.