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Results Research conducted by Bank Indonesia (2007) found that small businesses in East Java still encountered several obstacles including 1) limited government coordination on empowerment of small businesses, 2) inadequate appropriate technology, 3) no restrictions on the entry of imported products, 4 ) the absence of a master plan for structuring and fostering small businesses, 5) the inaccuracy of the small business data base (especially non-formal), and 6) the low trust of financial institutions (banks). The problem that arises is the statement that small businesses in East Java are still dominated by low technology (non high tech) , which limits them in innovating. This is compounded by weak innovative power and market access capabilities who do not have sustainability . A systematic innovation design is needed so that low-tech small businesses have the capability of innovation and increase their competitiveness. This study seeks to find out the systemic model of sustainable innovation and the competitiveness capabilities of low-tech small (non high tech) businesses in East Java. Keywords: sustainable innovation, technology, competitiveness

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