Abstract:Under the mission of innovation-driven entrepreneurship, many technological innovation activities driven by large contractors have emerged in mega projects such as Sichuan-Tibet Railway. However, there is still a paradox whether this decision has a positive impact on the technological innovation market. Based on the positive spillover effect between technological innovation activities and the contractor's construction business, this paper discusses two alternative ways for the contractor seek to technological innovation: cooperation or co-opetition with incumbent enterprises in the technological innovation market. The results based on modeling and game theory show that: (1) Under the condition of a positive spillover effect between construction revenue and technological innovation, the contractor will choose the technological innovation path of co-opetition. (2) In the case that the contractor chose the co-opetition path, he will provide higher innovation quality than the incumbent enterprises. (3) However, the selection of the co-opetition path of the contractor may reduce the overall innovation quality of the technological innovation market. Based on the findings of the research, corresponding suggestions are provided in terms of better promoting the innovation-driven entrepreneurial mission that characterizes mega project innovation activities.