Abstract
Performance improvement can be achieved if the organization can exploit and use its resources. One of the resources needed to achieve competitive advantage is entrepreneurial orientation. The entrepreneurial orientation helps organizations continuously create value chains by converting knowledge to be innovative and more competitive. The purpose of this research is to create innovation through entrepreneurial orientation. This study uses a quantitative approach with survey methods in data collection. The research location is in Kampung-Laweyan as the largest batik craft center in Solo. Samples were taken as many as 50 SMEs and analyzed using regression analysis. The results of the analysis show that innovativeness, risk-taking, and competitive aggressiveness have a positive and significant effect on innovation. The Proactive dimension has a positive but insignificant effect on the innovation variable. The Autonomy dimension has a negative and insignificant effect on the innovation variable. Suggestions for further research are that it is necessary to analyze the use of technology, especially for SMEs in anticipating uncertain conditions due to the Covid-19 Pandemic