Innovative capacity is a strategic factor in strengthening the competitiveness and productive performance of metalworking companies in Tungurahua, a sector dominated by SMEs that focus their innovation efforts on process improvement, resource optimization, and technological adaptation. Theoretical evidence points to a direct relationship between innovation and productivity, highlighting process innovation as a key element of business performance. The institutional environment and public policies influence this through financial incentives, training, and technical support. The study employed a quantitative, descriptive, and field-based approach, with a non-experimental design and a correlational scope. A questionnaire was administered to 14 companies registered with the SRI (C292001). Cronbach's alpha (0.965) confirmed a high correlation among the variables. The adoption of Industry 4.0 technologies-automation, robotics, additive manufacturing, digitization, and digital twins-along with R&D&I activities represents a decisive opportunity to modernize the sector and consolidate sustainable competitive advantages.
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