6. Conclusion
SMEs often have limited access to resources, making it important to understand how to best attract and use intellectual capital to enhance firm performance. Our findings suggest that identifying human capital and developing internal processes that develop organizational capital are keys to success. Attracting talented employees has long been a challenge for SMEs, often due to limited compensation capabilities. Based on our results, it is imperative that business owners seek out talented employees, who bring the needed skills and knowledge into the organization. While founding entrepreneurs play a critical role in venture creation, it is often the acquisition of skilled employees to allow a firm strategically develop a fully innovative business. As suggested by Edelman et al. (2005), resources alone do not explain firm performance; SMEs must identify and implement the best strategy to maximize performance. Research has shown that, without the effective implementation of internal processes and strategies, there is often a waste of resources and lack of direction and sustainability (Mazzarol et al., 2009). West and Noel (2009) suggest that small business owners must be rational in investing resources that make the best use of people and processes. We believe that the mediating effect of innovation on the human capital-performance and organizational capital-performance relationships sheds important new insights in the SME performance domain.
