Improving methods of Cobb-Douglas production function based on the innovation-development-mode

Cobb-Douglas production function, which has been already extensively applied in real-world, is an important part of macroeconomics models. But Cobb-Douglas production function is supposed to be used as a production function under the generalized technical condition. And it hasn't revealed how technical innovation and management revolution to promote production. As a result, there are obvious limitations in knowledge economy age that takes innovation as characteristic. This paper shows the analysis of the function and motive principle of innovative of production, and set up a value creation system including innovation value-chain based on Michael E. Porter's value-chain. Furthermore, a dynamic entire factor production function is built on the basis of the value creating system, including innovation production function, to reveal the function of innovation to production, and to quantify and evaluate innovation value with the founded innovation function model.