Knowledge capital, which measures how much a company's sales come from innovation, plays a big role in how well firms perform. A study on Swedish manufacturing firms found that firms with more knowledge capital tend to do better. The study also showed that firms that invest more in innovation per employee tend to have higher knowledge capital. Interestingly, firms that focus on radical innovations see even bigger boosts in productivity. Profitability is key for firms to invest in innovation, and rigid organizational structures can hinder innovation output. Overall, having a good balance of knowledge capital and innovation investments can help firms succeed.