[01] Nenet Natasudian Jaya, Management Department, Faculty of Economic, Mahasaraswati University of Mataram, Mataram, West Nusa Tenggara, Indonesia.

The pottery craft industry in Banyumulek, sub-district of Kediri, West Lombok District, West Nusa Tenggara Province has contributed to the economy of the community. It plays a strategic role in improving the dynamics of the local and national economy. It is known that innovation is the foundation for the craft industry to competitiveness. Therefore, the issues to be addressed in this study is how influence the innovation to the competitiveness. This study aims to produce a measurement model of innovation in improving the competitiveness of the Banyumulek pottery industry. The population in this study is all pottery business owners in Banyumulek, Kediri, West Lombok, West Nusa Tenggara. Primary data collection is through a questionnaire survey, and then analyzed using Structural Equation Modeling (SEM). Result of the research is: innovation culture has positive effect on innovation; innovation capacity has not positive effect on innovation; technical innovation has positive effect on innovation capacity; administrative innovation has positive effect on innovation capacity; and, innovation has positive effect on competitiveness.

Innovation, Product Competitiveness, Banyumulek Pottery

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