To most traditional industry clusters, technology innovation has great significances in improving industrial competitiveness and industrial upgrade. Basing on the practice of the enterprises' cooperation innovation activities in Yiwu small and medium-sized enterprises(SME) clusters, the paper establishes a infinitely repeated dynamic game model to explain how cooperation innovations between enterprises happen in Yiwu clusters and conclusions reveal the important impact of regional culture to enterprises' cooperation innovation activities. Furthermore, The model is applied and discussed in the practices of Yiwu SME clusters.