Abstract:The entrepreneur,as the leader of an enterprise, is the key factor in the enterprise's innovation, and is also the principal force in making that decision. But he will have to pay part of the cost in case of an unsuccessful innovation. So, it is essential to cultivate the innovational motivation of the entrepreneur. In the first part of the paper, based on the theory of principal and agent, a dynamic model is set up, considering that motivation in case of asymmetric information. The correlative parameters and solutions of that mode are analyzedl. Furthermore, the entrepreneur's innovational behavior in his decisions and the roles he plays in the process of innovation are also discussed. Some helpful suggestions on innovation are given.