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This is an Open Access article, distributed under the terms 
of the Creative Commons Attribution CC BY 4.0

1 Vinnytsia National Agrarian University, Ukraine (corresponding author)
E-mail: baldynyuk@gmail.com
ORCID: https://orcid.org/0000-0001-9014-8866

DOI: https://doi.org/10.30525/2661-5150/2022-3-4

FEATURES OF INNOVATION MANAGEMENT  
AT MODERN ENTERPRISES

Vasyl Baldynyuk1

Abstract. The article is aimed at substantiating the peculiarities of managing the innovative activity of  
enterprises in modern conditions. Methodology. The article substantiates the importance of innovation activity and 
innovations for modern enterprises. The review of statistical data on sources of financing of innovation activity  
in Ukraine is carried out. The reasons that led to the actual state of innovation in the country are indicated. 
The main stages of innovation management at enterprises, shortcomings and the most pressing problems are 
determined. Results. Considering the issue of innovation management, it is worth noting that currently there is  
no country where economic competition for leadership in world markets would not be associated with innovation, 
the innovation impetus, to a greater extent, concerns Ukraine. As never before, Ukraine must be ready to use 
innovative chances, increase competitiveness in order not only not to suffer losses, but on the contrary – to 
take advantage of new opportunities associated with EU enlargement. Under such conditions it is necessary to 
increase the efficiency of production factors, develop new competitive advantages that should ensure successful  
integration into the European and world markets. Practical implications. Innovation activity involves the  
development and implementation of new products, goods, technologies, organizational and managerial  
innovations through the development and use of the innovative potential of the enterprise. That is, development 
based on innovations enables enterprises to keep up with the times. Value/originality. It should be noted that 
 the process of managing the development of an enterprise on an innovative basis includes the processes of 
introducing and using new equipment, technologies, management, organizational and other types of innovations 
carried out through the coordination, organization, streamlining, regulation of innovation processes and  
innovation activities of the enterprise. All this is aimed at preserving, maintaining and strengthening the 
competitiveness of the enterprise as a whole.

Key words: management, innovative activity, management of innovative activity, innovation, management 
process, enterprise.

JEL Classification: M11, M21, O31

1. Introduction
In modern conditions, the main way to increase 

the competitiveness of industrial goods, maintain 
high rates of development and profitability of  
enterprises is the introduction of innovations. However, 
innovations are a source of development only under 
the condition of their active and effective use, as well 
as the creation of a favorable environment for their 
implementation. Thus, of particular importance is 
the strategic management of innovative development 
of corporate enterprises, which focuses production 
activities on the needs of consumers, allows for 
a more flexible response and timely changes, to achieve  
long-term competitive advantages. That is why the 

strategy of innovative development of an enterprise  
can be defined as a set of actions and methods 
of innovative activities that provide competitive  
advantages through the development and 
implementation of innovations. The ability to create 
and use innovations today is recognized as the most 
important factor in the formation of competitive 
advantages of the company. The acceleration 
of innovation processes has contributed to the  
emergence of a new category of companies for 
which innovation is the main activity, which leads 
to an increase in competitive position. For these  
companies, innovation can be interpreted as a factor 
that precedes changes in the external environment.



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2. The essence of innovation processes 
management at the enterprise

The innovation process is the preparation and  
gradual implementation of innovative changes.  
The result of this process is innovation as a change  
that is implemented and used.

In general, the innovation process consists of  
three stages – preparatory, production and market,  
each of which contains separate stages.

The innovative activity of the enterprise is aimed  
at creating and attracting innovations from the 
external environment, which contribute to increasing 
its competitiveness, strengthening its position in 
the market and provide development prospects. 
However, the ability of different companies to attract  
innovation varies significantly, which is mainly 
due to existing resource constraints. Management 
of innovative activity of the enterprise should be  
carried out, on the one hand, taking into account  
the potential of innovative activity in the formation  
of competitive advantages, and on the other – taking  
into account the investment opportunities of the 
enterprise (Telenchuk, 2022).

Management of innovation activity is a component  
of the management of a modern enterprise, which 
includes planning, organization and stimulation of 
innovation activity, implementation of innovative 
projects aimed at gaining competitive advantages and 
strengthening the market position of the enterprise 
(Stadnyk, 2006).

According to the Law of Ukraine "On Priority 
Areas of Innovation Activity in Ukraine", innovation  
potential is considered as a set of scientific and 
technological, financial and economic, industrial,  
social, cultural and educational capabilities of the 
country (industry, region, enterprise, etc.) necessary 
to ensure innovative development (Law of Ukraine 
"On Priority Areas of Innovation Activity in Ukraine", 
2003). At the same time, such a potential component 
as innovative culture, which characterizes the level of 
educational, general cultural and socio-psychological 
preparation of the individual and society as a whole  
for the perception and creative implementation of 
the idea of developing the country 's economy on an 
innovative basis, is separately distinguished.

A high level of education and intellectual activity, 
a pronounced sense of self-esteem, initiative, 
independence and independence of views, inherent 
creative inspiration, high efficiency, interest in  
obtaining results, the ability to perform labor  
functions at the level of world standards are important 
for the implementation of innovative activities.  
The more creative tasks and intellectual functions  
are involved in the work, the more noticeably the role 
of intangible incentives in the process of innovation 
increases.

Management of innovative development of a  
business entity should be focused on achieving its 
goals (winning a larger market share, increasing  
profits in the current period or in the future, ensuring 
high rates of sustainable economic development, 
etc.) in a competitive environment, even when the 
goals of other enterprises may not coincide (and 
usually do not coincide) with their goals (Cherep, 
Oleynikova, Cherep, Tkachenko, 2012). This conflict 
of goals must be duly taken into account, and the  
goals outlined must be reconciled with the possibilities 
for achieving them.

In today 's economy, the role of innovation has 
increased significantly. This is due to the fact that 
in a market economy innovation is a weapon of 
competition, as innovation leads to lower costs, lower 
prices, increased profits, the creation of new needs,  
the flow of money, to improve the image (rating)  
of the manufacturer of new products, to open and 
capture new markets, including foreign ones.

3. Features of innovation process management
The main fundamental principle of economic 

prosperity of any enterprise and the country as 
a whole is the constant implementation of innovative  
activities and creation of industrial property objects – 
the basis for the production of new competitive  
products, the introduction of new competitive 
technologies, providing super-profits.

The peculiarity of innovative activity is that it is 
an activity of increased risk compared to ordinary 
entrepreneurship (which is also carried out at one's 
own risk). This increased risk is due to the novelty, 
the creative nature of scientific and technical work, 
the possibility of obtaining both positive and  
negative results, so most entrepreneurs do not want  
to engage in innovation (Steblii, Tuvakova, 2016). 

The peculiarity of innovation management is to 
ensure quality decision-making under conditions 
of uncertainty and risk. However, the successful 
implementation of this task in most cases is  
hindered by the creation of the necessary  
organizational structure, which is especially  
relevant for large enterprises. In this regard, 
it is advisable for the latter to pay attention to 
the flexibility and adaptability of small firms to  
constantly changing conditions (Tomashuk, 2020). In 
such cases, the efficiency of innovation management 
can be significantly improved by creating special  
units or structural units on a permanent or temporary 
basis, for example, such as an internal enterprise. 
Adaptation of the organizational structure of a  
large enterprise to the specifics of innovation activity 
will contribute to its efficiency and effectiveness.

The process of management of innovative activity 
involves the implementation of certain functions  



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related to the organization, planning, motivation, 
regulation and control of the implementation of 
innovation. To ensure the effectiveness of this process, 
domestic enterprises should create appropriate  
systems for the implementation of these functions, 
that is, it is necessary to pay special attention to the 
formation of an effective mechanism of innovation 
activity management, both in theory and in practice.

4. Innovative activities of industrial enterprises
Effective management of innovative activities  

involves the implementation of the following  
basic steps:
1) determination of the most risky areas of the 
enterprise's activity;
2) use of various sources of innovative ideas;
3) determination of the quantitative goals to be  
achieved by the innovative project;
4) determination of the main stages of work on the 
implementation of the innovative project, while 
the transition to the next stage is impossible until 
the previous one is completed. Table 1 shows the  

number of innovatively active enterprises in Ukraine  
by type of economic activity.

In practice, the investment activity of industrial 
enterprises decreases from year to year. For example, 
the share of the number of innovation-active  
industrial enterprises in 2017 was 16.2%. In 2019, 
782 enterprises carried out innovative activity in 
industry. At the same time, the share of the number of 
industrial enterprises that implemented innovations 
(production and/or technological processes) in the 
total number of industrial enterprises was 15.8%.

Of the total number of innovatively active  
enterprises were: internal and external GDRs – 24.4%;  
purchase of machinery, equipment and software –  
64.7%; acquisition of external knowledge – 4.5%;  
other work – 20.6% of enterprises. By types of  
economic activity, the largest shares of innovatively 
active enterprises are food production – 16.8%, 
machinery and equipment production, n.i.i.o.g.  
(not included in other groups) – 10,2%.

The dynamics of changes in the number of  
innovatively active enterprises in Ukraine is shown in 
Figure 1.

Table 1
The number of innovatively active enterprises by type of economic activity

 
The number of innovatively  

active enterprises, units
Share of innovation-active enterprises  
in the total number of enterprises, %

2016–2018 2018–2020 2016–2018 2018–2020 
Total 8173 2281 28,1 8,5
Industry 4060 1550 29,5 12,9
Mining and quarrying 107 26 21,9 10,7
Processing industry 3626 1452 31,8 13,1
Supply of electricity, gas, steam and air conditioning 143 37 20,0 11,5
Water supply; sewerage, waste management 184 35 15,8 8,9
Transport, warehousing, postal and courier activities 568 133 15,5 3,6
Information and telecommunications 619 121 31,5 6,4
Financial and insurance activities 222 12 38,3 6,5

Source: formed according to the data of the State Statistics Service of Ukraine

1462
1679

1758 1715
1609

824 834 759 777 782

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

N
um

be
r 

of
 e

nt
er

pr
is

es
, u

ni
ts

Years

Figure 1. Number of innovatively active industrial enterprises in Ukraine (2010–2018), units 

Source: formed according to the data of the State Statistics Service of Ukraine



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Based on Figure 1, it can be concluded that in  

recent years there has been a significant decrease in the 
number of innovatively active industrial enterprises  
in Ukraine, which can be partially explained by 
the fact that part of the country 's territory with  
industrial production has become beyond Ukraine's 
control and, in general, by the deterioration of the 
cyclical component of the industrial products market.

5. Financing of innovative activity
Development and implementation of innovations 

requires investment resources, which are necessary 
to finance research and development, initiation 
and implementation of production of innovative  
products, their implementation and improvement. 
Effective innovation activity is possible only if the 
optimal amount of investment resources is attracted. 
The conditions for attracting investments depend  
on the investment climate of the country, region 
and enterprise. Today, the pace of investment in the  
country is low, and the distribution of investments  
by regions and sectors of the economy of Ukraine 
is uneven. To a large extent, investment activity in 
Ukraine is constrained by low effective demand  
of the population.

The analysis of statistical data on the sources of 
financing of innovation activities showed that only 

a small share of the costs of innovation activities is 
covered by the state budget (Table 2).

The innovative activity of industrial enterprises 
in Ukraine directly depends on the results of their 
economic activity, as the largest source of financing for 
innovations at industrial enterprises is their own funds, 
which in 2020 amounted to UAH 12,297.7 million.

General trends in the development of market 
economic systems show that the most effective is the 
activity of business entities that choose an innovative 
model of development. For successful management 
in modern economic conditions, strengthening the 
position of the enterprise in the market, it is important 
to constantly improve existing products, production 
technologies, methods of their implementation, 
introduce technical innovations, develop new products 
and bring them to market (Steblii, Tuvakova, 2016). 

The enterprise, which relies on innovations, is  
forced to improve the production base (logistics, 
structure of the distribution network, system of 
goods movement) and restructure the organizational  
structure of management in order to find strategic  
ways to increase competitiveness. On this basis, the 
adaptability of the enterprise to the dynamics of the 
market environment is expanding. The direction 
(development) of innovation development should 
correspond to both the internal and external 
environment, which is determined by the market 

Table 2
Sources of financing of innovative activity of industrial enterprises

Years
Expenditures  

on innovations,  
UAH mln

Including at the expense of
own funds  

of enterprises
state budget funds

funds of non-resident 
investors

funds from  
other sources

UAH mln UAH mln UAH mln UAH mln
2000 1757,1 1399,3 7,7 133,1 217,0 
2001 1971,4 1654,0 55,8 58,5 203,1 
2002 3013,8 2141,8 45,5 264,1 562,4 
2003 3059,8 2148,4 93,0 130,0 688,4 
2004 4534,6 3501,5 63,4 112,4 857,3 
2005 5751,6 5045,4 28,1 157,9 520,2 
2006 6160,0 5211,4 114,4 176,2 658,0
2007 10821,0 7969,7 144,8 321,8 2384,7
2008 11994,2 7264,0 336,9 115,4 4277,9
2009 7949,9 5169,4 127,0 1512,9 1140,6
2010 8045,5 4775,2 87,0 2411,4 771,9
2011 14333,9 7585,6 149,2 56,9 6542,2
2012 11480,6 7335,9 224,3 994,8 2925,6
2013 9562,6 6973,4 24,7 1253,2 1311,3
2014 7695,9 6540,3 344,1 138,7 672,8
2015 13813,7 13427,0 55,1 58,6 273,0
2016 23229,5 22036,0 179,0 23,4 991,1
2017 9117,5 7704,1 227,3 107,8 1078,3
2018 12180,1 10742,0 639,1 107,0 692,0
2019 14220,9 12474,9 556,5 42,5 1147,0
2020 14406,7 12297,7 279,5 125,3 1704,2

Source: formed according to the data of the State Statistics Service of Ukraine



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(market opportunities and threats), taking into  
account the pace of scientific and technological  
progress and is determined by changes in the micro  
and macro environment.

For an industrial enterprise, the technological and 
product innovations that have the greatest impact on  
its sustainable economic development can be divided 
into the following main categories:
1) innovations related to the method of manufacturing 
the product;
2) with a change in product characteristics;
3) with a change in the range of products.

Management of innovative activity is an integral 
part of the production and economic activity of the 
enterprise, which carries the impetus for development 
based on new approaches to solving ordinary  
production problems (Tychynsky, 2006). The optimal 
combination of production and innovation activities 
allows not only to constantly improve the production 
process and products, but also to act proactively,  
identify new promising areas or forms of business, 
diversify activities to meet new social needs.

6. Expenditures on innovation activities
In 2020, enterprises spent UAH 14,406.90 million 

on innovations, including UAH 10,185.11 million on 
the purchase of machinery, equipment and software, 
UAH 3,486.30 million on internal and external 
research and development, UAH 37.49 million on the 
acquisition of other external knowledge (acquisition 
of new technologies), and UAH 1,079.45 million on 
other work related to the creation and implemen- 
tation of innovations (other costs) (Table 3) (Ministry 
of Economy of Ukraine, 2022). 

Consider the structure of expenditures on innovation  
by type of economic activity (Figure 2).

By types of economic activity, the largest amount 
of funds for innovation activities was spent by food 
production (2927.252 million UAH), metallurgical 
production (1924.217 million UAH), production of 
basic pharmaceutical products and pharmaceuticals 
(1868.092 million UAH).

7. Implementation of innovations  
at industrial enterprises

In 2020, the Ukrainian industry introduced  
4066 units of new products, see Table 4.

Among the most important areas of innovative 
development of industrial enterprises should be 
highlighted further improvement of products in 
terms of integration into its characteristics of modern 
digital technologies related to the operation of 
products. Expanding the range of products with 
different price-quality ratio will also contribute to 
reaching a wider range of consumers (Kolomiets, 
Tomashuk, 2021). It is important to change the 
priorities of industrial production development  
in favor of those industries that are able to create  
high-tech products and move away from the raw 
material model of national economic development. 
The innovation policy of the enterprise should take  
into account the specifics of the industry to which 
it belongs, try to ensure the efficient use of available 
resources, build partnerships with all potential 
participants in the innovation process. At the same  
time, when making managerial decisions, it is impor-
tant to determine the effects of the introduction of 
innovations in the areas of their formation (economic, 
technological, social, environmental). Among the 
promising directions of increasing the innovative 
potential of an industrial enterprise, it is necessary to 
note the need to develop teamwork methods among 

Table 3
Innovation expenditures of industrial enterprises

Year
Expenditures  

on innovations,  
UAH mln

Among them

scientific research  
and development (GDR)

including
other innovation costs 

(excluding GDR)
GDR performed  

by own forces
GDR performed  

by other enterprises
UAH mln UAH mln UAH mln UAH mln

2010 8045,5 996,4 818,5 177,9 7049,1
2011 14333,9 1079,9 833,3 246,6 13254
2012 11480,6 1196,3 965,2 231,1 10284,3
2013 9562,6 1638,5 1312,1 326,4 7924,1
2014 7695,9 1754,6 1221,5 533,1 5941,3
2015 13813,7 2039,5 1834,1 205,4 11774,2
2016 23229,5 2457,8 2063,8 394,0 20771,7
2017 9117,5 2169,8 1941,3 228,5 6947,7
2018 12180,1 3208,8 2706,2 502,6 8971,3
2019 14220,9 2918,9 2449,9 469,0 11302,0
2020 14406,9 3486,3 2650,4 835,9 10920,6

Source: formed according to the data of the State Statistics Service of Ukraine



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2927,3

581,8

1025,2
1868,1

1924,2

525,5 1358,5

Production of food products

Production of beverages

Production of chemicals and chemical 
products

Production of basic pharmaceutical 
products and pharmaceutical 
preparations

Metallurgical production

Production of electrical equipment

Figure 2. Structure of expenditures on innovation by types of economic activity

Source: formed according to the data of the State Statistics Service of Ukraine

Table 4
Implementation of innovations at industrial enterprises

Year

Share of the number of 
industrial enterprises 

that implemented 
innovations 

(production and/
or technological 

processes) in the total 
number of industrial 

enterprises, %

Number of types of 
innovative products 

(goods, services) 
introduced in the 

reporting year, total 
units

Among them
Share of the volume 

of sold innovative 
products (goods, 

services) in the total 
volume of sold products 

(goods, services) of 
industrial enterprises, %

are new to the market
were sold machines  

and equipment

2000 14,8 15323 - 631 9,4
2001 14,3 19484 - 610 6,8
2002 14,6 22847 - 520 7,0
2003 11,5 7416 - 710 5,6
2004 10,0 3978 - 769 5,8
2005 8,2 3152 - 657 6,5
2006 10,0 2408 - 786 6,7
2007 11,5 2526 881 881 6,7
2008 10,8 2446 840 758 5,9
2009 10,7 2685 719 641 4,8
2010 11,5 2408 606 663 3,8
2011 12,8 3238 900 897 3,8
2012 13,6 3403 672 942 3,3
2013 13,6 3138 640 809 3,3
2014 12,1 3661 540 1314 2,5
2015 15,2 3136 548 966 1,4
2016 16,6 4139 978 1305 … 4
2017 14,3 2387 477 751 0,7
2018 15,6 3843 968 920 0,8
2019 13,8 2148 418 760 1,3

2020 5 14,9 4066 691 647 1,9

Source: formed according to the data of the State Statistics Service of Ukraine



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the staff, to improve the skills of those employees  
whose activities are related to innovative developments. 

8. Conclusions
Thus, it can be stated that the innovative activity of 

the enterprise is the key to its effective functioning. 
However, innovation activity, like any other, requires 
systematic management through a mechanism that 
should be an element of the overall mechanism of 
strategic management of the enterprise. Innovation 
activity is one of the main components of the process 
of ensuring the successful functioning of enterprises. 
Therefore, modern economic conditions require 
intensive innovation activities, effective organization 
of research and development, implementation of 
innovations, reduction of innovation risks, strategic 
management of innovation activities of each enterprise.

Intensification of innovation activity of domestic 
enterprises will contribute to strengthening the 
competitive advantages of the industry both in  
domestic and foreign markets through the 
implementation of scientific and technical potential, 
which will be manifested in: 

1) increasing the quality and, accordingly, 
competitiveness of products due to the use of new or 
modernized production methods;
2) capturing new markets and increasing the 
volume of product sales through the introduction of  
innovative technologies in the sales organization and 
positioning of goods on the market;
3) improving the financial results of enterprises due  
to the increase in cash receipts from the sale of  
innovative products;
4) optimization of business processes and rational  
use of the enterprise's production capacities by 
launching advanced innovative technologies.

Industrial enterprises in Ukraine are the 
main subjects of the market economy, and the  
competitiveness of the national economy as 
a whole depends on their competitiveness. Therefore, 
the introduction of innovations at industrial  
enterprises should be considered as a continuous 
process aimed at creating products and organizing 
production processes that are more efficient 
than their existing counterparts in the market  
environment.

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Received on: 5th of September, 2022
Accepted on: 10th of October, 2022

Published on: 31th of October, 2022