Abstract: R&D (research and development) has been a hot issue in the field of innovation study. However, the effect that non-R&D innovation has on enterprise performance is often ignored. In fact, this kind of innovation activities is an important source of the SMEs’ competitive advantages. For SMEs, when they face the constrain of resources, they can effectively use the handy resources including R&D and non-R&D resources to build innovative capabilities and acquire consistent competitive advantages. Existing study ignored the interactive effect between R&D innovation and non-R&D innovation on enterprise performance in our country’s SMEs. Based on interviews and 345 survey samples of SMEs in China, we find that external technology adoption, product and service customization, organizational innovation and marketing innovation and R&D innovation have significant substitution effect on innovation performance. The substitution effect between external technology adoption and R&D innovation is instability. Imitation innovation has no significant effect on innovation performance. This study can give some advices for SMEs to rely on low cost innovation modes (e.g., non-R&D innovation) to improve innovation ability and performance. Also, it has some reference value for the optimization of China's SMEs’ innovation policies.