Abstract
This study aims to analyze the factors influencing the increase in innovation and technology utilization in Small and Medium Industries (SMEs) in Ponorogo Regency. The factors examined include government policies, academic involvement, interactions between government and academics, and the capacity to absorb technology by SMEs, with control factors acting as mediating variables. This study used a quantitative approach using multiple linear regression analysis and the Sobel test to determine the direct and indirect effects between variables. Primary data were collected through questionnaires distributed to SMEs in the region. The results indicate that government policies and academic involvement significantly influence the increase in innovation capacity of SMEs, both directly and through control factors. Furthermore, the interaction between policies and academics, as well as the capacity to absorb technology, also positively contribute to SME innovation. These findings reinforce the importance of triple helix collaboration between government, academics, and business actors in creating a sustainable innovation ecosystem. This research recommends institutional synergy, locally based training, and technological assistance to strengthen the competitiveness of SMEs in the digital era.

Keywords: Innovation, Technology, SMEs, Government Policy, Academics, Technology Absorption, Triple Helix.