<![CDATA[This study examines the relationship between Strategic Innovation Quality and Human Resource Management (HRM) Approach toward Competitive Advantage and their implications for the Sustainable Development of the Modest Muslim Fashion Industry in Central Java, Indonesia. Using a quantitative explanatory method, data were collected from 360 respondents representing Muslim fashion SMEs across various districts. The analytical technique employed was Structural Equation Modeling–Partial Least Squares (SEM–PLS) to test the structural relationships among variables.The results indicate that Strategic Innovation Quality has a positive but insignificant effect on Competitive Advantage, suggesting that innovation alone does not directly enhance competitiveness without strong managerial and HR support. Conversely, the HRM Approach shows a significant positive influence on both Competitive Advantage and Sustainable Development, emphasizing the critical role of human capital alignment in sustaining organizational growth. Furthermore, Competitive Advantage significantly contributes to Sustainable Development within the modest Muslim fashion industry. However, the mediating role of Competitive Advantage between Strategic Innovation Quality and Sustainable Development was not supported, indicating that innovation strategies may influence sustainability through alternative pathways rather than through competitiveness alone.These findings enrich the literature on Islamic creative industry management by providing empirical evidence from Central Java. The study highlights the necessity of integrating HRM-based capabilities with innovation strategies to achieve long-term sustainability and resilience in the global modest fashion market.]]>
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