Purpose – The competitive edge is to great extent connected to the development and use of knowledge based economy (KBE), and in particular to innovation being the result of the knowledge. The aim of the paper was to present relationships between the selected knowledge components (relevant to innovation implementation) as well as between innovations and changes of business models. These relationships are shown both in terms of theoretical – cognitive and empirical aspect in the enterprises applying innovations. The research problem concerned the identification of business model elements changes caused by the implemented innovations. Design/methodology/approach – Creating and implementing innovations in the enterprise is possible by the use of knowledge. The research hypothesis concerned the impact of innovation on the change of business models. The basic survey was carried out in the form of an enhanced diagnostic survey which attracted 150 intentionally selected Polish enterprises, belonging to SME sector. The structural analysis of the business model is based on the concept of ” The new age of innovation.” Prahalad C. K, M. S, Krishnan, by modifying it to the research needs. Originality/value – This research focused on two important issues of the knowledgebased and innovation -based management. The first of these is the importance of particular elements of company knowledge (both knowledge about potential business and environment) for creating and deploying innovation. Another important issue of the research was to assess the changes in business models under the influence of implemented changes The research results underline a significant importance of innovations (as an important element and stimulus of KBE) not only for a strategically management of enterprises, but also for the dynamics of their business models. Practical implications – The outcomes of the application of the research show that companies have implemented various kinds of innovations. Presentation of the nature and relationship between knowledge components, innovation and modern business models represent an important knowledge and tips for both the entrepreneurs wanting to implement such innovations and for organizations that decide about financial support of innovation at SME. The results of the tests should contribute to understanding of the importance of innovation related to gaining competitive edge and encourage companies to use modern business models that are able to create and implement innovations.
Keywords – Innovation, Knowledge Based Economy (KBE), business models, small and medium enterprises (SMEs)