The purpose of this research is to understand the relationship between knowledge management and innovation among small and medium enterprises in the Taichung area. The main focus was on the understanding, executive ability and willingness to cooperate with other enterprises. Data was collected by personal interview, and executives of enterprise clusters in the Taichung area were requested to complete questionnaires. The results of the questionnaires were subjected to statistical analysis to determine if the enterprises were aware of the importance of knowledge management and innovation, and if they had the intent to cooperate with other enterprises in a cluster. We chose enterprises in five industrial zones as our sample areas and sent out 435 questionnaires. Three hundred and thirty two were returned and of these 306 were effective for analysis. The statistical approaches used included factor analysis, reliability analysis, descriptive statistic analysis, one-way ANOVA and correlation analysis. The results show that there are significant differences in factors such as gender, age, department, and corporation location for the senior officials in the enterprises. There were no significant differences in the factors of: number of years working, education, position, employee numbers, company capitalization2 and turnover of the company on the understanding, executive ability and will to cooperate with other enterprises. It was found that senior officials with different backgrounds have positive attitudes and relationships with knowledge management and innovation. Suggestions are provided for government officials, the related enterprises and future researchers who are interested in this field.
