Nowadays, there are a lot of innovations being discussed, conducted in a seminar, written, and explained in a small to a large classroom and also a meeting room. Innovation is related with the essentials of surviving in the middle of industrial era 4.0. Innovation is unable to be separated with the personal knowledge, in which both of them need a good and continuous management. This research aimed to measure the tacit influence and explicit knowledge towards innovation capability as well as answering research questions regarding the impact of knowledge sharing to improve innovation capability in the manufacturing industry. Data collection is done through a simple random sampling technique given to 610 employees in packaging industries in Indonesia. The questionnaire results that were given back and were valid have a number of 393 samples. Data processing was used SEM method with SmartPLS 3.0 software. The result of this research concluded that explicit and tacit knowledge have positive impact towards innovation capability. This new research proposed a model for building innovation capability in packaging industries through tacit and explicit knowledge transfer. This research could pave the way to improve readiness index to packaging industries in facing the era of industrial revolution 4.0.