Abstract: Based on the improvement of classical knowledge production function, a knowledge production function containing R&D and knowledge stack is designed, two factors, namely, knowledge spillover in industry agglomeration and government sustaining strength are introduced. By using the spatial panel data models, the innovative capacity of region high-tech industry is analyzed. The result shows that the knowledge production function containing the R&D and knowledge stack could accurately announce the relationship between input-output in knowledge production and the industry agglomeration in the region with that the knowledge spillover among regions significantly influences the innovation production in regional high-tech industry.