The purpose of this study is to clarify the effect of Osaka municipal policy for promoting innovation at SMEs. As a result of the empirical analysis by the interview and the questionnaire survey in the case study of 'Osaka Top Runner Project', the innovation promotion policy creates intermediate results such as fostering market orientation based upon customer orientation, competitor orientation and interfunctional coordination and acquisition of firm-specific informational resources, on that basis, it was suggested that it will lead to the final result of sales and business continuity. From this result, we came up with a hypothesis of causal model about the innovation promotion policy and its effect.