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Practitioners of economic geography recognize innovation as the key factor in sustainable economic development and urging a city to evolve. Urban development evolves from manufacturing-based development to knowledge-based development. Identifying the future benefits of urban development is a research issue. This work analyzes development performance based on quantitative indices of critical knowledge and innovation that enhance economic growth and influence society and competitiveness. The research further identifies the possibility of knowledge dissemination and innovation. This work investigates the key factors encouraging the development of a knowledge-based city for Helsinki, Melbourne, and Hsinchu in terms of economy, society, environment, and management, and observes that the progressive and positive circular stimulation for a city requires not only the cultivation of human capital, but also the construction of social environment and internal relations to form a high-density knowledge network. This work demonstrates that Hsinchu Science Park acts as a highly stimulated and highly interactive knowledge engine by building a dynamic innovation model based on circular stimulation of knowledge feedback to construct an urban environment and series of talent networks. The city, ultimately, reaches a virtuous cycle for innovation and achieves critical factors for the evolution of a knowledge-based city.