Knowledge spillovers have strong impact on firm innovation, Great difference, in quanlity as well as quantity, exists between urban and rural economy owing to the stock and the channel of knowledge, which is important reason to interpret why a firm wish to locate in the city. But the capacity of absorbing knowledge cross firms is variant, therefore the innovativeness based on which is not homogenous, so urban economy varies each other. Knowledge spillovers and technology innovation balance the development of a city.