Abstract: Innovation is the creative process of improving all activities in an enterprise used to develop and deliver products and services. It is a core competence and development driver of future – oriented enterprise. The definition, characters and types of innovation are presented at first of all. The innovation capacity of an enterprise not depend upon the creation of innovation and methodology of innovation only, more important are the culture, management and reward systems of innovation in the company. For enterprise to position itself competitively in the quick changing market environment , it is essential that everyone in that company be involved in modern innovation strategies and practices. Changes initiated to make people more motivated at work also serve to increase the level of innovation. There are three basic innovation strategies of products and business in the real world: offensive, keep abreast and imitative. The Chinese manufacturing industry should change their strategy from imitative to keep abreast and offensive step by step in the near future. The implementation of innovation includes four main phases: the generation and activation of creative idea, preparation to realizing it, realization of creative idea and transfer innovation into practice. At last the innovation management as a new business is introduced.

Key words: Innovation management, Innovation strategy, Knowledge supply chin, Product innovation, Technology innovation