Knowledge spillover and innovation agglomeration are important for regional economic growth. A new economic growth model based on spatial knowledge spillover and industrial agglomeration has been developed. The model shows that when knowledge spillover is globalized, per capita output growth is not affected by the distribution of innovation sectors. However, when knowledge spillover is localized, regions with dominant innovation sectors experience increased output growth with more spillover and agglomeration, while regions without dominant innovation sectors see a slower growth rate due to the resilience of knowledge spillover.