UNCOVERING THE CONNECTION BETWEEN PRODUCT INNOVATION AND BUSINESS PERFORMANCE: PERSPECTIVES FROM AKAR WANGI (VETIVER) HANDICRAFT INDUSTRY IN GARUT

Abstract

The vetiver handicraft industry is one of the leading potentials of Garut Regency, which has high economic value. This study aims to analyze the effect of product innovation on business performance in the vetiver handicraft industry in Garut Regency. Using a quantitative approach and non-experimental or survey research type and explanation research design, this study involved 66 vetiver business actors as respondents. The analysis employed the Structural Equation Modeling method based on Partial Least Squares (SEM-PLS) to examine the relationship between product innovation and business performance. The findings of this study indicate that product innovation exerts a significant influence on business performance, underscoring its critical role in the development of the vetiver handicraft industry in Garut Regency. The study further demonstrates that product innovation, in its entirety, contributes positively and significantly to the enhancement of business performance. The findings of this study underscore the pivotal role of continuous innovation, particularly in enhancing product quality and ensuring the continued competitiveness and business sustainability of the vetiver handicraft industry in Garut Regency.