The Role of Innovation Capacity in Improving Company Performance in Creative Industry Sub-Sector Leather Industry

Abstract

This study aims to empirically examine the role of innovation capacity in improving the company's performance. The study used a quantitative explanatory survey method. Collecting data using a questionnaire with random sampling technique. Respondents are the creative industries of the leather, leather goods and footwear sub-sector with a sample of 252 MSMEs in the leather, leather goods and footwear industry in West Java. The data that has been collected was analyzed using the Structural Equation Model (SEM). The results of the study show that innovation capacity significantly plays a role in improving company performance The highest contribution of each dimension of innovation capacity came from investment in research and development and the lowest was contributed by new distribution channels. Meanwhile, the highest achievement of the company's performance came from the growth and learning perspective of and the lowest was contributed by the customer perspective of The results of the hypothesis test show a positive and significant effect so that the role innovation capacity affects in improving company's performance empirically acceptable. The implication of this research is that it is necessary to optimize the capacity to innovate through the effective use of distribution channels and the addition of new distribution channels in addition to product innovation and process innovation, also to develop a customer perspective through efforts to retain customers (retention rate) and growth in the number of customers (acquisition rate) as well as through a financial and financial perspective. internal business process perspective.

Keywords

• Company Performance
• Creative Industry
• Innovation Capacity
• Leather Industry
• MSMEs