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Technology and innovation have been recognized as important and crucial to reducing poverty, generating wealth and bringing social progress for Vietnam. But the result is different in different sectors. Craft villages are composed mostly of small and micro household business characterized by family ownership and heavy involvement of the family members. Many clusters have achieved great success thank to applying innovation in production and business. What enabled small producers to introduce new technology into innovation process? How has new technology been developed, adapted and disseminated? There could be an investigation of innovation in informal micro and small enterprises with a view to offer alternatives. Actually, recent research shows changes in competitive capabilities, living conditions and the environment in informally organized craft villages. We propose to look at some examples of small-scale craft villages: Bat Trang and Duong Lieu in northern Vietnam. Both were identified as innovation industries based on the three common key elements: newness, value creation and innovative process.