Abstract: High quality development should be supported by innovation capability and the upgrading of innovation capability relied on learning. This study constructed a conceptual model between interactive learning, absorptive capacity and innovation capability based on desk research. Then a large scale investigation of small and medium-sized manufacturing enterprises was carried out, 331 valid questionnaires were obtained and structural equation model was applied to the empirical test of the research hypothesis through usage of Mplus7 software. The results show that the interactive learning between enterprises and external knowledge enhances the innovation capability through the intermediary role of absorptive capacity. The potential absorptive capability only effects to innovation realizing capability, and it does less effect than realized absorptive capability. The realized absorptive capability effects intermediary roles to the opportunity identifying capability, innovation realizing capability and commercializing capability. The research results in fact expose the internal connection between knowledge exploration capability, absorptive capability and innovation capability of enterprises.

Key words: interactive learning, absorptive capability, innovation capability, manufacturing SMEs