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Despite the growing interest in innovation within low-tech herbal manufacturing from strategic and policy standpoints, little empirical research exists on their innovation capability. The purpose of this study is to explore innovation capability and its effect on product innovation performance of small low-tech herbal manufacturing companies.

Innovation capability has been important to large companies in general, and to some small companies in particular, to address the issues of survival and profitability. A case study method is adopted to explore the process of innovation capability of low-tech manufacturing companies.

Analysis of the two case studies reveals that collaborating with institutional agents, customers, suppliers and competitors in interactive learning, coupled with idea management and idea implementation, are factors that have influenced innovation capability …