Measurement of Innovation Capability of Small Enterprises in the Wholesale Fabric Sector

The purpose of this paper is to measure the innovation capability of small enterprises in the wholesale fabric sector. This article uses a quantitative approach by applying Rasch analysis to measure the level of capability of small industry innovation through 48 statements addressed to 303 small businesses. Primary data was collected through distributing questionnaires directly to 325 respondents and 303 were returned. The instrument used in this study showed excellent reliability and validity, demonstrating that the construct capability of innovation could be fulfilled according to the Rasch model analysis. The results showed that small businesses that had the highest innovation capability were respondent number 037: female, age of the company: 0 – 2 years, number of employee: 0 – 10 people, and qualification: bachelor degree, marked by a tendency to answer agreed on various statements related to innovation capabilities; while respondent number 146, male, age of the company: 0 – 2 years, number of employees 0 – 10 people, and qualification: bachelor degree shows that answered towards disagreeing from the instrument of innovation capability so that it was concluded that the respondent had the lowest innovation capability among other respondents. Keywords: Rasch model analysis, small enterprises, innovation capability