Abstract: Background: New value innovations are organically ingrained and complementary to the process of knowledge management. However, epistemological trends highlight only limited studies to have explored how the effectiveness of knowledge management leverages new value innovations. Objectives: This research evaluates how the effectiveness of the small- and medium-sized enterprises’ (SMEs) knowledge management systems enhance new value innovations so as to identify the major paradoxes and a business model that coherently integrates knowledge management with new value innovations. Method: Using a qualitative research method, semi-structured interviews were used to explore the opinions of 20 purposively sampled managers from 20 SMEs on how knowledge management edifies new value innovations. Results: A strong culture of information utilisation was found to enhance relevant analysis and identification of new gaps in the markets that must be filled through new value innovations or modifications of the existing products. However, poor culture of knowledge utilisation, cost of knowledge management and the often poorly functional business information systems were still reiterated as major paradoxes hampering effective knowledge management as one of the determinants of new value innovations. Conclusion: The study concluded with a model highlighting a continuum of knowledge management–new value innovation pillars like a strong culture of information utilisation, and encouragement of creativity that the executives must consider to create an effective knowledge management foundation that subsequently leverages the overall effectiveness of new value innovations.