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The software industry develops rapidly without technology innovation (TI) in Jiangsu Province of China. Using the system dynamics (SD) method, this paper researched the causal relationship between TI's factors, and established the SD model. Then the model was tested and simulated. The results show that the simulation values tally with the actual values. Internal and external power factors of enterprises are positively related with TI. Then enterprises' scientific funds and the government's support are main power sources to promote TI.