3, informal systems of governance and control have the potential to both enable knowledge flows and, at the same time, allow an SME the flexibility to respond to technological, competitive and market dynamics. Rather than build formal systems it is more appropriate to encourage connectivity (Chaminade and Roberts, 2003), to foster (internal and external) relational capital development, as these elements facilitate the development and exploitation of human capital and provide the explorative activities which, when harvested, build structural capital (in processes, products and services). This implies taking a network perspective in SME guidelines, where much of the value from knowledge is created in its exchange rather than its possession