In the current advanced era, knowledge and the applications of it are the essence of organizations for achieving competing advantage and defined as a new strategic approach to innovation and a potential element for creating larger market share. In the contemporary business world, characterized by dynamic and continuous changes, the competitiveness of enterprises depends on the speed by which they introduce new, superior products/services and innovate various business processes in comparison with rivals in the market. The competitiveness of enterprises is determined by their flexibility and innovation ability. Knowledge, as a resource, and knowledge management, as the so-called meta-resource, are the factors that determine innovation capacity of an enterprise. The aim of this paper is to point out the importance of developing and implementing an effective system of knowledge management in the modern enterprises for innovativeness. This is because knowledge management affects better utilization of enterprises' resources for creating innovations and increasing their absorptive capacity, i.e. increasing the ability to use external knowledge in the function of improving the level of previously acquired knowledge.