Promoting the intelligent upgrades of small and medium-sized enterprises is one of the important tasks of implementing “Made in China 2025” in China. As a front runner of nation-level reform, Zhejiang Province has provided much room for innovation and development, along with the emergence of a new type of ecology, accelerated formation of two ecosystems and international cooperation, and a supportive policy environment. Therefore, this paper uses 173 Small and Medium-sized Enterprises (SMEs) from Zhejiang Province as the research objects, builds a binary selection model, and analyzes the dynamic and constraining mechanism of intelligent upgrades of SMEs with regard to employee qualification, technology, capital, policy environment, and so on. The study finds that: First, among three main industries, manufacturing is the major industry for the intelligent upgrades of SMEs and there are significant demonstration effects and industry heterogeneity. Secondly, the willingness to upgrade intelligently for SMEs is relatively strong. More than half of SMEs that have not intelligently upgraded show willingness to implement intelligent upgrades. Thirdly, factors such as corporate profitability, human capital quality, and industry intelligence level have significantly promoted the intelligent upgrades of SMEs, while the impact of labor cost, capital structure, government subsidies, and other variables are not significant. This conclusion still works after a number of robustness tests. Last but not least, based on the above conclusions, this paper proposes corresponding policy recommendations which are practically beneficial to the development of SMEs in China.