ABSTRACT

The research aims to know how the owners of Small Medium Enterprise (SME) develop their innovation capacity. Besides that, are there impact of differentiation in developing innovation capacity to SME's operational performance.
To answer that questions descriptive statistics was used explain the first question, and then or manager of SME. Using purposive random sampling, we got 100 SME.
The result of descriptive statistics show there are 6 design indeveloping innovation capacity and the differentiation of them have no impact to SME's operational performance.

Keywords: kapabilitas inovasi, kinerja operasional