PeranInovasi: Pengembangan Kualitas Produk dan Kinerja Bisnis

The objective of this paper is to study and explain the effect of innovation on product quality and business performance of small and medium enterprises in East Java. Using a proportional area random sampling and path analysis,five hypotheses were tested, in which two of the hypotheses were rejected. The study shows the impact of innovation on product quality and the impact of product quality on business performance. This shows the need of small and medium enterprises to be innovative and have a high quality of product to succeed in the global competition.