Abstract: This article explaining regional innovation from the interactive process of RIS structure and heterogeneous firms’ growth. The key to good regional innovation performance is breakthrough innovation, which can boom the growth of heterogeneous firms. Diverse try-by-error of innovators cluster is the source of market discovery and breakthrough innovation. The regional innovation network must discover and allocate resources to support heterogeneous SME’s entry and survival. The route128 area as an example, the performance of regional innovation depends on whether regional innovative resources are open to heterogeneous SME.

Key words: heterogeneous firms cluster, discovery process, regional innovation