A search into the literature showed that there is still a dearth of studies on the categorisation in the innovation capabilities and organizational performance. Therefore, the aim of this study is to examine the relationship between innovation capabilities and organizational performance of economic development department in UAE. Based on through existing literature this paper  propose the key factors of innovation capabilities that can influence organization performance include; vision and strategy, organizational intelligence, creativity and idea management, management of technology and organizational structure and system. This paper provides useful information related to the innovation capabilities and organizational performance to ensure effective organizational performance.