Abstract: Abstract： Innovation is not only the source of an enterprise’s progress, but also the inexhaustible power of its prosperity. The indicators on the evaluation of large and medium-sized industrial enterprises’ technological innovation capabilities are advanced, and a model based on factor analysis method is established. The model is verified by an example of large and medium-sized industrial enterprise, it is shown how to make use of this model to objectively evaluate their technological innovation capabilities and employ quantity indicators to compare themselves with other enterprises. And the key factor that is the most related with the enterprises’ innovation is found out. The research provides more scientific technological innovation policies for enterprises promoting technological innovation capabilities and is in response to the call on building an innovation-oriented country.

Key words: factor analysis method, large and medium-sized industrial enterprise, technological innovation capabilities, evaluation system