Abstract: The purpose of this study is to examine the influence of creative economy on the ukm up grade through the competitiveness of ukm. Population in this research is student of STKIP PGRI Jombang Program study Economic Education class of 2016 which amounted to 150 people, and all used as sample of research. Data obtained from respondents perceptions are analyzed descriptively with structural equation modeling using AMOS application. The results of research proved that the creative economy affect the competitiveness of products, creative economy affect to UKM up grade, the competitiveness of products affect UKM up grade, creative economy affect UKM up grade to increase the class through product competitiveness. Next researchers are advised to review research related to UKM upgrading with local wisdom.