Leveraging Intellectual Capital for Organisational Performance: the Interplay of AI Capability and Human Capital in SMEs

Abstract

In the age of artificial intelligence (AI), manufacturing small and medium-sized enterprises (SMEs) increasingly rely on intangible resources to remain competitive and adaptive. Existing research has largely focused on AI adoption and technological readiness, with limited attention given to how firms leverage intellectual capital to strengthen organizational capabilities and improve performance outcomes. Grounded in intellectual capital theory and the dynamic capabilities perspective, this study adopts a quantitative approach, using data collected from manufacturing SMEs and analysed with Partial Least Squares Structural Equation Modelling (PLS-SEM). The findings are expected to reveal that AI capabilities and human capital significantly enhance productivity, innovation, and operational effectiveness, underscoring the strategic importance of intellectual capital in improving organizational performance in AI-driven business environments.