This study examines the relationship among engineers’ basic skills, problem-finding and -solving capabilities, and innovation outcomes, using questionnaire survey data for Lao P.D.R., Thailand and Vietnam for the period 2016 to 2017. We perform two-stage least squares (2S.L.S.) estimations, which use the variables for engineers’ basic skills and capabilities for finding and solving problems within the firm as instruments, and the indicators for capabilities for finding and solving problems of suppliers and customers as endogenous variables. The estimation results reveal the relationship between problem-finding and -solving capabilities and process innovation. The findings from the empirical analyses suggest a possible upgrading strategy for firms to transform quality control management into innovative abilities. The estimation results also support the necessity of policy support for nurturing both engineers’ basic technological and managerial skills and capabilities for problem-finding and -solving.