1.1 introductions
In Ethiopia Due to the growing economic concerns of today, increasing attention is given to leather sector. And producing competitive product through innovation value chain in global market is very vital as leather sector is priority sector for Ethiopia.
In Ethiopia the manufacturing of leather at industrial scale started in1920s by producing leather for horse seat back. The seat back(Kroch) required as one of the elements in fighting against the invaders, at formerly named “askokoda” now called Addis Ababa tannery (Abebe ,2014).
Ethiopia aspires to become a middle-income country within the coming decade, thereby lifting tens of millions of its people out of poverty. To realize this goal, the Ethiopian government adopted the five-year Growth and Transformation Plans (GTP-I, 2010e2015 &GTP-II, 2016e2020) ( Wakeford et al..,2017).
According to Berhanu (2016) In the five years Growth and Transformation Plan of Ethiopia the leather industry sector has been given high priority through interventions in various areas. But the author couldn’t consider the function of innovation value chain for leather industry.

However, Ethiopia’s leather industry is currently at nascent stage. But, it has low quality and low competitive leather products in global market because of limited Innovations value chain.
In other side the innovation is also important to grow the organization. According to authors the growing systems of the organization can measure in terms profit. But also the innovation can occurs knowledge, experience, efficiency and quality (Sullivan 2008). It is also the process of making changes to something established by introducing something new. As such, it can be radical or incremental, and it can be applied to products, processes, or services and in any organization.

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Hence, innovation has a vital role to play in realizing Ethiopia’s producing high competitive leather product in global market through innovation value chain and knowledge management for Ethiopia’s leather industry