Science and Education Publishing Journal of Behavioural Economics, Finance, Entrepreneurship, Accounting and Transport 2 1 2014 02 23 Significance of Innovation in Business Process of Value Chain 18 25 EN G.P. Reddy Vijayachandra Reddy.S. Research Associate, Agribusiness Management Division, National Academy of Agricultural Research Management (NAARM), Hyderabad, Andhra Pradesh JBE2014213 10.12691/jbe-2-1-3 2013 12 09 2014 01 14 2014 02 23 This article constructs a speculative framework to explain significance of Innovation in business value chains. It draws on three streams of literature - need, significance and developing innovation capabilities in order to identify three important variables which contribute a greater role in influential how value chains are directed and changed accordingly to the Innovation process in business world. These are: (1) Need of Innovation to Energize, Growth and Profit, and Survival of firms (2) Significance of innovation in Business Process, and (3) Development of Innovation Capabilities. Thus, the article highlights the concept of value and it's progress as value chain then it focus on the needs and importance of value chain triggered by innovation. It also helps to integrate small firms and corporate sector and establish a link between small firms and international markets through effective value chain system. In addition, it describes the value chain innovation capabilities and roles of various dimensions in the innovation. So that innovation in the business process can facilitate appropriate participation of the small and corporate sector firms through suitable policy framework.