Technique intensive innovation is a very important measure for a company to gain advantage in competition．With consideration of the importance of internally production cost and externally innovation allowance method，this paper assumes that different companies’products are substitutable and have different products costs． We discussed two kinds of companies—one with cost advantage，the other with cost disadvantage—and government’s two allowance methods—allowance on innovation investment and allowance on product innovation project． We analyzed how the two kinds of government’s allowance method influence the companies’choice of their innovation model． The result from our analysis and numerical simulation shows that if the government is in a low level of allowance on innovation investment or product innovation project，the two kinds of the companies，either in cost advantage or in cost disadvantage，will tend to evolve into the model of gradually innovation and the allowance in product innovation takes a great effect on its evolutionary speed． If the government is in a high level of allowance on innovation invest ment or product innovation project，the influence from such two allowance methods are different for the two kinds of companies’innovation model choice; the allowance on innovation investment pushes the two kinds of companies to breakthrough their innovation model，but the allowance on product innovation project shows little effect in guiding companies selecting the breakthrough innovation model． When the allowance on product innovation project is in a high level，the two kinds of companies evolve slowly into the gradual innovation model． Enlarging the scale of the allowance amount，refining the structure of innovation allowance，and setting up a long team innovation mechanism all enables the innovation allowance to become an effective away of motivation on innovation．