Innovations are new ideas that are valued in the marketplace. Some new ideas create new value by introducing new products or services. Others improve the existing products or/and make them less costly. In a knowledge-based economy, knowledge is the main engine towards regional economic development. The existing literatures did discuss the characteristics by five dimensions of the knowledge-based economy, including national system of Innovation, human resources, infrastructures at the information technologies (IT) level, entrepreneurship, and institutional environment, etc., but not mention the sustainable functions of knowledge innovations in regional economic development. This paper focuses the interactive linkage between knowledge innovations and regional economic development, and finds there exists a sustainable chain of the innovations based on knowledge flows and regional economic development, which is analyzed theoretically and checked out with some Chinese evidences of Shanghai and Chongqing.
