ABSTRACT Given the paucity in the current research on value co-creation between employee and organization, this research addresses what real incentives behind a value co-creation to enhance innovation capability in the context of knowledge-intensive firms in the UK, with an emphasis on SMEs. Quantitative method was implemented using online survey tool to collect data from knowledge-intensive firms in the UK. With 97 valid respondents, the empirical findings show that while reputation, knowledge self-efficacy and organizational rewards are found to be significant factors of value co-creation whereas enjoyment in helping others and management support are proven to be non-significant factors. Based on this empirical result, the managerial implications that relate to Maslow’s theory and competing values framework are proposed to help knowledge-intensive SMEs based in the UK enhance the value co-creation process inside the organization.