Abstract: Analyzing the characters and activities of technological innovation diffusion within the enterprise cluster, this paper reveals the barrier factors in maintaining innovation diffusion process, and establishes the analytical framework of incentive mechanism for technical innovation diffusion by using the theory of principle-agent,then using the "rank-order to urnament" for reference to establish and analyze the incentive mechanism model.These analyses deduce a relevant incentive mechanism and provide a theoretical basis for enterprise clusters in taking effective measures to encourage technological innovation diffusion.

Key words: enterprise cluster, technological innovation diffusion, incentive mechanism