Abstract:In the dynamic development of domestic clusters, the traditional footwear industry has obtained a uniquely competitive advantage, but it still remains at the low additional value in the global value chain. The business model and operation method in the industry are out of line with the smart and innovative development of the global industrial chain. In this case study of Wenzhou foot wear industry cluster, the three characteristics of large scale, fierce competition and extensive development are firstly presented. Then the study summarizes its competitive advantages of significant scale and scope benefits, high industrial activity and complete industrial chain. The study further poses the problems that hinder the development and upgrading of the industrial digitalization, such as OEM processing, lack of self-owned brand, low product quality, lack of leading enterprises and professional market development, low agglomeration effect, and lack of professional talents. Finally this study offers the suggestions to promote technological innovation, transformation and upgrading in traditional foot wear industry, which means that the government should formulate supportive policies and relevant standards to accelerate the intelligent enterprises, to build a collaborative innovation system based on the new information technology such as "Internet plus", artificial intelligence, cloud computing and to encourage the enterprises to accelerate the development of intelligent products.