Abstract:Digital technologies have a systematic impact on industrial innovation, including changing the process of innovation and overturning the paradigm. Based on the functional analysis method of innovation system.We analyzes the mechanism of how digital promoting industrial innovation. We found that the dimension of improvement is multiple and comprehensive. We summarized the functional dimensions of industrial innovation system into eight aspects, our main conclusion is: Knowledge creation is embodied in the process of fusion and re-creation, knowledge diffusion relies on algorithms and models based on industrial knowledge, digitization offers many opportunities for innovation by stimulating demand and breaking industry bottlenecks, platform promotes extensive resource collaboration by addressing key obstacles to industry development, platform enables multiple innovation subjects through the supply of industrial infrastructure and generic services. Finally, we comb out the weak and positive factors of innovation system in digital era and put forward relevant policy suggestions.