Defects　of　linear　and　circular　models　on　industry　agglomeration　based　on　the　assumption　of　simplification　of　production　functions,　resulting　in　contribution　of　agglomeration　drive　to　market　competition,　have　been　pinpointed　in　failing　realization　of　inborn　characteristics　industry　agglomeration.　A　dynamic　evolution　model　on　industry　agglomeration　based　on　swarm　intelligence　was　provided　with　computer　simulation,　with　the　result　that　the　accumulation　and　diffusion　of　knowledge　was　the　prime　motivation　of　industry　agglomeration.