Abstract
This paper examines the innovative intellectual capital variables of SMEs, such as business culture, knowledge intelligence, business communication, and digital business, using the intellectual capital theory as a frame of reference for SMEs in South Africa. The phenomenal rise of SMEs and a gap in the existing literature on innovative intellectual capital served as the driving forces behind this study. Lack of innovative skills brought on by low levels of intellectual capital are seen as the driving force behind this unwelcome phenomenon. This conceptual paper aims to bring a broader understanding innovative competencies which are crucial for businesses to sustain themselves, grow, and perform well SMEs will be helped in the development of platforms to enhance their operations and advance the South African economy. A detailed evaluation of secondary sources of information provided by the University of Johannesburg was used in this paper. This paper analyses the relevant conceptualization of key concepts and the literature on intellectual capital implementation. Based on the conceptualization and literature, this study found that the performance of SMEs is significantly influenced by innovative intellectual capital variables and that for SMEs to have a competitive advantage in the long-run the SMEs should embrace the intellectual capital variables covered in this paper. Adequate knowledge of intellectual capital by SMEs operating in South Africa can be use to improve their capacity for innovation and expand their operations. The literature from the study revealed that intellectual capital contributes to the development of competitiveness in SMEs through the use of business culture, knowledge intelligence, business communication, and digital business processes.