THE ROLE OF KNOWLEDGE MANAGEMENT IN THE PROCESS OF INNOVATION OF SERVICES

Product or service innovation is an important factor of competitive advantage and achievement of high business results of companies. They have influence on the growth and development of the company, their market position, image among consumers and they are key factor of employee satisfaction. Service innovation includes the improvement of already existing services or create new ones. Thus, wide offer of services, the company gives a stronger impression in the consumer's awareness because sometimes, due to intangibility, consumers do not experience the service in the right way. In literature, knowledge management is often presented as one of the tools for managing innovation development. Innovations are created by creative employees, with their knowledge, skills and experience, so the link between knowledge and innovation creation is evident. The development of innovation is becoming more and more dynamic and shorter, therefore knowledge management plays a central role in this process. The first requirement for the development of innovation is that the company's management must know and analyze the intellectual abilities and skills of employees in order to create a work environment that supports the development of creativity and research activities of employees oriented towards building innovations. Second, the company's management in the process of innovation development engages more resources (technological, financial and physical) and experts from different areas that use these resources. This includes the application and integration of knowledge in the field of market research, marketing, information technologies, knowledge in the field of production and delivery of services, finance. Benefits of successful integration of knowledge management practices in order to create innovations are multiple and relate to the range of services that customers want. In addition, if innovation succeed in the market, it requires an additional investment in the skills of employees which leads to the expansion and enrichment of already existing knowledge and the strengthening of the "stock of knowledge". Strengthening the company through the expansion of knowledge and intellectual property, as a result of the positive impact of knowledge management on the development of innovation, expand the possibilities for companies to invest in new business ventures and emerging in new markets, which can give multiple benefits. The main goal of the paper is to point out the role of knowledge management practice within the various functional levels in service companies that contribute to the development of innovations. Realization main goal of research requires the application of appropriate scientific methods: induction, deduction, analysis, and synthesis. Based on the review of the results of research that has been done so far, it can be concluded that knowledge management mean one systemic approach which include development of appropriate knowledge management practices that govern the development of innovations and influences on their successful placement and launching on the market.