Small and medium enterprises (SMEs) make substantial contributions to national economies and are estimated to account for 80 percent of global economic growth (Pavic et al., 2007). Today in the competitive business environment knowledge is thought to be the primary resource (Baporikar, 2016). The conventional factors of production have become secondary. It is straightforward to obtain them, provided there is knowledge (Chen et al., 2006). Davidson & Griffin (2003) pointed out small businesses have contributed many innovative ideas and technological breakthroughs to our society. In order to maintain and develop further their innovative skills SMEs need to develop their understanding of knowledge management (KM), as a key business driver rather than as a resource-intensive additional initiative (Zanjani et al., 2008). “KM has become the latest strategy in increasing organizational competitiveness” (DeTienne & Jackson, 2001). The critical assumption of KM is that organizations that manage organizational and individual knowledge better will deal more successfully with the challenges of the new business environment. KM is seen as a vital factor in realizing and sustaining organizational success for improved efficiency and innovation. Today, knowledge is the primary source of competitive advantage and the key to success for organizations in the knowledge economy (MacKinnon et al., 2002; Patriotta, 2003). This study analyzed different aspects of KM for SMEs with respect to developing countries and proposed strategies for better implementation of KM programs in developing countries.