Trust as a Key Factor in Knowledge Transfer and Innovation Capabilities

The era of knowledge-based economy has created rapid changes in the business environment. Maintaining a that requires innovation to maintaining its competitiveness. Innovation knowledge resources, where transfer plays an essential role creating new can be utilized improve capabilities. However, is considered not simple process because stickiness knowledge, but on other hand, regarded as something happen instantly. Trust therefore factor strengthening causality relationship between and This study used survey approach with Partially Least Square (PLS) data analysis techniques. respondents this research are SMEs creative industry handicraft sub-sector Province DIY, Bali North Sulawesi, which justified representations Indonesia. Based 201 collected, it was found trust significantly moderated Hence, transfers needed for developing industries capabilities strengthened by trust.