Abstract: Industrial digitization & digital industrialization are regarded as the main battlefield of technological and economic competition by various countries and their enterprises. However, it is still poorly understood by the academic community how these modern digital technology will affect the innovation division of labor between upstream and downstream enterprises in the industrial chain. This paper tries to reveal the mechanism in the dynamic process of digitization by referring to the theory of "social environment-heterogeneous labor matching structure", the mirror hypothesis and system integration hypothesis of organizational economics. The paper divided the digital development level of automobile emission control system into three stages: "component collaboration", "human-machine dialogue" and "automatic control", and has examined the relative probability of supplier and manufacturer choosing product architecture innovation or product component innovation at different stages of digital development using a binary selection model with USPTO invention patent application data from 1970 to 2018. The results show that the proportion of component suppliers choosing architecture innovation increases significantly when the industrial chain shifting from "component collaboration" to "human-machine dialogue", and then decreases further shifts to "automatic control", but no evidence has been found that it has decreased to the level of "component collaboration" stage. Therefore, digitalization will encourage more suppliers to choose product framework innovation, and thus intensify the competition degree of innovation divisionof labor within the industrial chain. Combined with mechanism analysis, dominant cognitive labor and its dominance over productive labor, transactional labor and R&D labor will become the key source of competitive advantage of enterprises in the digital supply chain era, while the shortening of industrial chain and the blurring of organizational boundaries may be important by-products of industrial chain digitalization. The research conclusion can provide important enlightenment for enterprises to participate in supply chain innovation division competition, and organizational form and management mode adaptation reform in the digital era.