Innovation is widely recognized as a major source of modern productivity growth. Indeed, it is seen as constituting a central process of economic advancement in industrialized countries. Despite this, a considerable gap still exists in knowledge and technological capability between industrialized countries and the more dynamic developing countries such as China. Small and medium sized enterprises (SMEs) are a major contributor to China’s economy and SME’s contribution to China’s GDP is close to 60%.This book studies the strategy and mechanism of leveraging innovation capability in China’s SMEs by applying the theory of Total Innovation Management (TIM), which is the new paradigm of managing innovation in enterprises developed by the Research Center for “Innovation and Development” (shortly RCID) of Zhejiang University, China. According to Eric von Hippel, MIT, RCID is the Top 10 Innovation Management research institutes in the world.Leverage Innovation Capability probes the strategy and mechanism of leverage the innovation capability in the firm, especially in China’s SMEs. It analyzes how the SMEs utilize all the innovation elements in the firm, including Strategy innovation, Tech innovation, marketing innovation, organization innovation, culture innovation, innovation networking, learning and knowledge management, high involvement innovation, cooperation innovation, etc. to leverage innovation capability.