What specific role should state-owned enterprises (SOEs) occupy within the framework of the national innovation system? This paper employs a sample of listed companies in China to investigate the spillover effects of innovation in state-owned enterprises from a novel perspective of supply chain spillovers. The study revealed that the innovations of SOEs have a considerable spillover impact on key suppliers and customer groups within their supply chains. This spillover effect confers benefits on both state-owned and private suppliers and customer firms within their supply chain systems. It not only contributes to an increase in the quantity of innovations within these firms but also enhances the quality of innovations. However, the impact of private sector innovation on the supply chain is not substantial. Moreover, the spillover effects of SOE innovation on suppliers and customers are more significant when the constraints on their financing are less pronounced. The above findings indicate that SOEs possess distinctive advantages in facilitating collaborative innovation within industrial supply chains. It is therefore recommended that policy-makers facilitate the full realisation of this special role of SOEs.