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This study aims to examine the influence of entrepreneurship, marketing capabilities, relational capital and empowerment toward the innovation capability and performance. The problem of the study is how to improve innovation capabilities and performance of SMEs woven in Troso Jepara. The sample in this study is SMEs woven owners in Troso Jepara consisting of 120 people by using a purposive sampling method. The data is collected by survey method through interviews and questionnaires. The results of the data analysis using PLS demonstrate that there is a significant and positive influence of entrepreneurship, marketing capabilities, relational capital and empowerment toward innovation capability and performance. Performance significantly and positively influences the competitive advantage. Based on the findings of this study, innovation capabilities and performance can be enhanced through the development of entrepreneurship, marketing capabilities, relational capital and empowerment.
Sulistyo et al. (Sun,) studied this question.