Abstract:Technological innovation is not only a technical activity but also an economic activity which is a set of technical supply and demand in one. In this paper,the method of dynamic evolutionary game is used to analysis the relationship between technology supply, market demand and technological innovation. The conclusion is that only when the scale of demand reaches a certain critical value, technological innovation would be achieved.On this basis, it is concluded that there are certain critical values in all Industrial chain links by introducing the above theory to the global industry chain within the Intra-product Specialization. Especially, it is very critical for the cultivation of high-tech industries and the enhancement of elasticity of response to build an industrial chain based on our country’s development needs by using local demand scale then the ability of technology innovation will get breakthrough improvement. On the basis of theory analysis,the conclusions are verified by the statistical analysis on high technology industry data.