The research explores the challenges and limitations of driving innovation in Thai SMEs. The information and data are studied and gathered through the literature review and the series of interview with the top management of leading SMEs that received the grant support from the National Innovation Agency (NIA). The result of this study concludes that the barriers affecting the development of innovation in Thai SMEs consist of 1) insufficient government support 2) high innovation development and R&D costs and 3) difficult access to financial resources.