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Corresponding author:
1 Black Sea Research Institute of Economics and Innovation, Odesa, Ukraine.
E-mail: Olena.Krylova.O@gmail.com
ORCID: https://orcid.org/0000-0001-9700-7302
2 Black Sea Research Institute of Economy and Innovation, Odesa, Ukraine.
E-mail: k.s.shaposhnykov@gmail.com
ORCID: https://orcid.org/0000-0003-0640-9934

DOI: https://doi.org/10.30525/2661-5150/2020-1-18

ACTIVATION OF INNOVATIVE ENTREPRENEURSHIP 
DEVELOPMENT

Оlena Krylova1, Kostiantyn Shaposhnykov2

Abstract. The purpose of the article is to develop proposals for intensifying the development of innovative 
entrepreneurship in Ukraine. The importance of intensifying innovative entrepreneurship is recognized by 
any business entity, because new innovative ideas, solutions embodied in a particular product can provide 
competitive advantages. The presence of entrepreneurial initiative by business entities, the use of effective 
tools to stimulate innovation, creativity and effectiveness of innovation can significantly enhance innovation 
entrepreneurship and overall efficiency of the innovation process. The methodological basis of this work is the 
synthesis of general scientific methods of theoretical and empirical research (method of cognition, analysis 
and synthesis, generalization and systematization of information). Results. Innovative entrepreneurship 
covers all stages of the innovation cycle: from the initiation of a new idea to obtaining specific results from 
the market use of the product. The main subjects of innovative entrepreneurship can be any enterprises and 
organizations that carry out innovative activities or are innovatively active. To develop effective measures to 
intensify innovative entrepreneurship, first of all, it is advisable to focus on identifying the strengths and 
weaknesses of innovative entrepreneurship, as well as opportunities and threats for its intensification in Ukraine.  
In this sense, it is important to assess the current level of innovation process, its staffing and financial resources, 
the level of innovation infrastructure, the establishment of integration relations between the main participants 
in the innovation process, the effectiveness of innovation, demand for innovative products and more. Practical 
implications. The analysis allowed us to reveal certain results. The strengths of the possible activation of the 
innovative enterprise include: the presence of a high level of personnel component of scientific potential, which 
characterizes the ability to generate new ideas; accumulated experience of successful innovation, cooperation 
between science and business, as evidenced by the main indicators of innovation, the number of innovation-
active enterprises and enterprises in industry that implement innovations. Weaknesses for the intensification 
of innovative entrepreneurship should be highlighted: insufficient funding for science and education; declining 
trends in almost all performance indicators of innovation, which requires rapid implementation of measures to 
curb their further development in the field of innovation. Thus, in order to intensify innovative entrepreneurship 
in the near future, it is advisable to implement a number of measures, the tasks of which cover the following 
main areas of change: clear awareness of the national economy’s ability to innovate, create conditions for new 
products, increase its competitiveness; ensuring diversification of sources of financing of innovative activity of 
enterprises in order to reduce the costs of acquisition and use of innovative products; establishing close and 
productive interaction of the main participants of innovative entrepreneurship. Value/originality. The use of 
comprehensive analysis allows to identify the main problems of hidden entrepreneurship, taking into account 
the specifics of its manifestation in modern conditions.

Key words: innovative entrepreneurship, innovative ideas, participants in the innovation process, innovative 
products, cooperation between science and business

Jel Classification: O32, O38, P21



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1. Introduction
The importance of intensifying innovative 

entrepreneurship is recognized by any business 
entity, because new innovative ideas, solutions 
embodied in a particular product can provide 
competitive advantages. However, the active 
development of innovative entrepreneurship in 
Ukraine is hampered by a number of environmental 
factors, which affects both the total number of 
businesses that implement innovations and the 
effectiveness of their innovation activities. Among 
the important factors hindering the development of 
innovative entrepreneurship, first of all, it is worth 
noting the low consumer demand for innovative 
products, insufficient funding for scientific 
and technological development of the national 
economy; limited venture financing instruments; 
imperfection of motivation for active innovation. 
The presence of entrepreneurial initiative by 
business entities, the use of effective tools to 
stimulate innovation, creativity and effectiveness 
of innovation can significantly enhance innovation 
entrepreneurship and overall efficiency of the 
innovation process. World experience proves 
that an essential aspect of the intensification of 
innovative entrepreneurship is considered to be 
the rapprochement between the participants in the 
innovation process in the direction of increasing 
motivation in the creation and use of innovations. 
The implementation of such mutually beneficial 
cooperation between the participants will 
accelerate the technological renewal of enterprises, 
ensure the recovery of industry and the creation of 
new high-tech industries at the national level.

2. Innovative entrepreneurship concept
A significant amount of scientific research is 

devoted to the issues of intensification of innovation 
processes, effectiveness of innovation activities, 
development of innovative entrepreneurship. 
At the same time, the dynamism of the external 
environment, its complexity and unpredictability 
cause obstacles, new challenges for the development 
of innovation processes, which requires constant 
improvement of existing mechanisms, search 
and timely use of new opportunities and effective 
tools to stimulate innovative entrepreneurship.  
In particular, in Ukraine there are conducted 
thorough works on commercialization of results 
of innovative activity, directions of stimulation of 
activity in the field of innovations, systematization of 

the basic tools of activization of innovative business, 
financial aspects of support of development 
of innovative business and introduction of tax 
incentives in this sphere in modern conditions 
(Melnyk, 2014; Pavlenko, 2007; Lyakh, Lyashenko, 
Kuzmenko, 2018; Ivchenkova, 2018, etc.). Selection 
of previously unsolved parts of the overall problem. 
Despite the significant number of publications on 
the intensification of innovative entrepreneurship, 
they are more concerned with the development 
of small and medium-sized businesses in the field 
of creation and dissemination of innovations. At 
the same time, any enterprise is characterized by 
an understanding of innovative entrepreneurship 
as a permanent flow of innovative solutions, and 
therefore the issues of intensification of such 
activities in the economy of Ukraine and increase 
its effectiveness require in-depth attention. Such 
areas of further research are the identification 
of factors that prevent the activation of the 
effectiveness of innovative activities of enterprises 
and the development of a set of measures to find 
opportunities to eliminate the main obstacles to the 
development of innovative business. The purpose 
of the article is to develop proposals for intensifying 
the development of innovative entrepreneurship in 
Ukraine.

3. Parameters of development  
of innovative entrepreneurship in Ukraine

In the most general sense, innovative 
entrepreneurship is an activity that focuses on the 
application of new approaches, raw materials, ideas, 
products to meet consumer demand. Innovative 
entrepreneurship covers all stages of the innovation 
cycle: from the initiation of a new idea to obtaining 
specific results from the market use of the product. 
The main subjects of innovative entrepreneurship 
can be any enterprises and organizations that carry 
out innovative activities or are innovatively active. 
Innovative activity of enterprises must have certain 
characteristics: 
– high level of flexibility, which allows to 
ensure constant product renewal and withstand 
competition; 
– creativity, which allows to provide a constant flow 
of new ideas for fundamentally new products and 
processes; 
– speed of response to the transformation in the 
needs of consumers; 
– high motivation for innovation, independence in 
decision-making. 



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To develop effective measures to intensify 
innovative entrepreneurship, first of all, it is 
advisable to focus on identifying the strengths and 
weaknesses of innovative entrepreneurship, as well 
as opportunities and threats for its intensification 
in Ukraine. In this sense, it is important to assess 
the current level of innovation process, its staffing 
and financial resources, the level of innovation 
infrastructure, the establishment of integration 
relations between the main participants in the 
innovation process, the effectiveness of innovation, 
demand for innovative products and more. The state 
of affairs with the innovation processes of individual 
countries and regions of the world as a whole is 
provided by rating assessments comparing the 
countries of recognized international institutions. 
Ukraine is represented in several international 
rankings that assess innovation potential, 
technological and innovative competitiveness. 

The most common for assessing innovation 
processes are the following international 
rankings: Global Innovation Index, Bloomberg 
Innovation Index, Global Competitiveness 
Index, Innovation Index European Innovation 
Scoreboard (Innovation Union), Global Talent 
Competitiveness Index, Readiness for the Future 
of Production Assessment. The Global Innovation 
Index is generally considered to be one of the 
indicators of an objective assessment of the success 
of the world’s innovation policy. The leaders of this 
index are mainly highly developed countries with 
high per capita income. According to the ratings by 
groups of human capital indicators (share of highly 
qualified specialists in the general structure of 
employment), research (cooperation of universities 
with business), protection of intellectual property 
rights (quantitative indicators on patents, as well as 
quantitative and qualitative parameters of scientific 
and technical activity issues) strong positions are 
held by the EU countries (Khaustov, 2018). 

In particular, the leaders of this index in 2017 were 
fifteen European countries. China has been in the 
top 25 of the global innovation index since 2016. 
These ratings assess not only the current state of 
affairs, but also partially characterize the possibilities 
of intensifying innovative entrepreneurship in the 
country, as well as the effectiveness of innovative 
activities of major economic entities. 

According to the Global Innovation Index, human 
capital, knowledge and research results are still the 
main competitive advantage of Ukraine. However, 
even these benefits are gradually being lost. Thus, 

in 2018, compared to 2017, according to the sub-
index “Human Capital and Research”, Ukraine 
moved to 43rd place with a loss of 2 positions. 
The reason for this situation was the reduction of 
education expenditures in% of GDP (26th place 
in 2018 compared to 22nd in 2017) and research 
and development expenditures in% of GDP (62nd 
place and 54th place, respectively).

The general state of innovation activity, which 
determines the prospects for the implementation of 
innovation processes and motivation for innovative 
entrepreneurship can be tracked by a number of 
basic indicators, which are presented in Table 1.

The analysis of the main indicators allows us 
to make some significant generalizations about 
the possibilities of intensifying innovative 
entrepreneurship: The dynamics of the number 
of innovatively active industrial enterprises over 
the last 19 years is characterized by insignificant 
fluctuations (about 1-2%). On average, the share 
of such enterprises is about 16% of the total 
number of industrial enterprises. A similar trend 
is characteristic of the dynamics of the share of 
enterprises that have implemented innovations. On 
average, the fluctuations between annual indicators 
are 2-3%. At the same time, in some periods the 
enterprises show annual growth (2010–2013, 
2014–2016). However, for the share of innovatively 
active enterprises and for enterprises implementing 
innovations, 2019 was marked by a decrease of 
almost 2% compared to 3% in 2018. The growth 
almost doubled in 2019 compared to 2018, which is 
characterized by a change in the share of innovative 
products (goods, services) ) sold in the total sales 
of c enterprises. But compared to 2010, there is 
a significant decline (almost 3 times) (see Table 1). 

According to the State Statistics Service of 
Ukraine, the share of scientific and technical work 
performed in GDP for 2010–2019 decreased 
significantly (from 0.91% to 0.43%). The share 
of scientific, scientific and technical works at the 
expense of the state budget also decreased by 
0.12% percent of GDP in 2019 compared to 0.34% 
in 2010 (see Table 1). 

In 2010–2019, expenditures on education and 
science decreased significantly. Thus, expenditures 
on science decreased from 0.8% of GDP to 0.2%, 
on education – from 6.4% to 4.3% of GDP. Despite 
slight fluctuations, the number of specialists 
performing scientific and technical work is also 
reduced to the number of employed population 
(per 1,000 people). Thus, during 2010–2019, this 



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reduction amounted to 0.7%. Relative stability is 
characteristic of the dynamics of innovation costs 
in % to the total volume of sold industrial products 
(goods, services). During the period 2010–2019, 
a significant reduction was observed only in  
2016–2018 from 1.1% to 0.4%. 

The growth of international registration of 
industrial property objects should be considered as 
a positive characteristic. Thus, in 2019, this figure 
increased to 657 units compared to 484 units in 
2010. At the same time, the number of received 
security documents was reduced. If in 2010 their 
number was 5.3 thousand units, in 2019 it is already 
3.85 thousand units.

Thus, summing up the prospects for intensification 
of innovative entrepreneurship, we can highlight 
the following: 
– the strengths of the possible activation of the 
innovative enterprise include: the presence of 
a high level of human resources component in 
scientific potential, which characterizes the ability 
to generate new ideas; accumulated experience 

of successful innovation, cooperation between 
science and business, as evidenced by the main 
indicators of innovation, the number of innovation-
active enterprises and enterprises in industry that 
implement innovations; 
– weaknesses for the intensification of innovative 
entrepreneurship should be highlighted: insufficient 
funding for science and education, declining trends 
in almost all performance indicators of innovation, 
which requires rapid implementation of measures 
to curb their further development in the field of 
innovation; insignificant performance indicators 
for security documents; 
– opportunities for activating an innovative 
enterprise: stimulating the introduction of 
innovations in industrial enterprises will allow 
to intensify the creation of new technologies and 
new innovative products; improving the efficiency 
of the use of existing research and innovation 
potential; diversification of sources of financing 
of innovative activity due to active introduction 
of startups, distribution of world experience of 

Table 1 
Indicators that characterize the ability to intensify innovative entrepreneurship

Indicators 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
1 2 3 4 5 6 7 8 9 10 11

The degree of depreciation of fixed assets of industry,% 74.9 75.9 76.7 77.3 83.5 60.1 58.1 55.1 60.6 56.9
The share of the volume of performed scientific and 
scientific-technical works in GDP, %

0.91 0.80 0.80 0.80 0.69 0.63 0.48 0.45 0.47 0.43

The amount of expenditures for scientific and scientific-
technical work at the expense of the state budget, % of GDP

0.34 0.30 0.34 0.33 0.26 0.20 0.16 0.16 0.17 0.12

The number of specialists who perform scientific and 
technical work, to the number of employed population 
(per 1 thousand people)

4.4 4.2 4.0 4.0 3.8 3.9 3.9 3.7 3.5 3.7

The expenditure on science, % of GDP 0.8 0.7 0.8 0.8 0.7 0.6 0.5 0.4 0.4 0.2
The expenditure on education, % of GDP 6.4 6.2 6.7 6.7 5.9 5.3 5.0 5.4 5.1 4.3
The share of enterprises implementing innovations in the 
total number of industrial enterprises, %

11.5 12.8 13.6 13.6 12.1 15.2 16.6 14.3 15.6 13.8

Number of innovatively active industrial enterprises in% 
to the total number of industrial enterprises

13.8 16.2 17.4 16.8 16.1 17.3 18.9 16.2 16.4 15.8

Expenditures on innovations in% to the total volume of 
sold industrial products (goods, services)

0.8 1.1 0.8 0.7 0.5 0.8 1.1 0.4 0.4 0.5

The number of new technological processes introduced 
into production, thousand units

2.0 2.5 2.2 1.6 1.7 1.2 3.4 1.8 2.0 2.3

Number of introduced types of innovative products 
(goods, services), thousand units

2.4 3.2 3.4 3.1 3.7 3.1 4.1 2.4 3.8 2.2

The share of the volume of sold innovative products 
(goods, services) in the total volume of sold products 
(goods, services) of industrial enterprises, %

3.8 3.8 3.3 3.3 2.5 1.4 0.9 0.7 0.8 1.3

Received security documents, thousand units 5.31 5.25 4.96 5.41 4.81 4.5 4.1 4.05 3.93 3.85
International registration of industrial property, units 484 552 498 677 594 622 623 565 506 657

Source: compiled according to official statistics



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creation of business universities that will promote 
convergence of education with business; improving 
the regulatory and legal support of innovative 
entrepreneurship through measures to stimulate 
demand for innovation by business; raising the 
general level of innovative business culture and 
development of innovative entrepreneurship 
through access to the EU financial programs; 
– among the main threats to be addressed should be 
identified: financial and administrative barriers that 
hinder the development of innovative business; 
insufficient sources of funding for innovation 
due to high interest rates on loans; insufficient 
development of innovation infrastructure; the 
difficulty of training and selecting skilled workers 
to produce innovative ideas; lack of motivation 
among young people to innovate; imperfection and 
complexity of procedures for obtaining security 
documents for intellectual property. 

Thus, systematizing the results, it is advisable to 
focus on the need to implement the following areas 
of activation of innovative entrepreneurship in 
Ukraine (Figure 1).

Block 1. Ensuring the development of innovation 
infrastructure. The main objectives of this block 
of measures are to overcome barriers that hinder 
the development of infrastructure to support 
innovative entrepreneurship: 
– formation of objects of innovation infrastructure 
at the local level; 
– creation of a network of business incubators, 
strategic centers, technology parks, including 
higher education institutions; 
– formation of databases of innovative ideas that 
should be available to entrepreneurs and other 
stakeholders; 
– providing consulting support for the protection 
of intellectual property, creating startups, advising 
on the process of commercialization, marketing 
innovations.

Block 2. Increasing the volume of innovative 
products and ensuring the export of high-
tech products. The tasks of this group include 
measures related to increasing the production of 
innovative products and the share of high-tech 
exports: 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Grouping of directions of activization 
of innovative business on blocks

Block 1. Ensuring the development of innovation 
infrastructure

Block 2. Increasing the volume of innovative products and 
ensuring the export of high-tech products

Block 3. Stimulating the demand for innovation

Block 4. Differentiation of sources of financing of scientific 
and technical and innovative activity

Block 5. Formation of a system to support the development of 
innovative entrepreneurship at the regional and local levels

Block 6. Formation of a favorable institutional environment 
for innovation

Block 7. Improving the information support of innovative 
entrepreneurship

Block 8. Ensuring an increase in the level of innovation 
culture in the field of innovative entrepreneurship

Figure 1. Directions for activating innovative entrepreneurship



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– monitoring of technology development and 
application of forecasting at macro and micro levels; 
– identification of opportunities for technology 
production in Ukraine; 
– active introduction of technology transfer; 
– development of import substitution programs for 
innovative products; 
– stimulating the export of high-tech products.

Block 3. Stimulating the demand for innovation. 
The tasks of this group are to overcome obstacles 
on the part of governmental and departmental 
structures in stimulating the demand for innovation: 
– introduction of benefits for companies that 
manufacture innovative products; 
– introduction of incentives for enterprises that 
buy innovative products; 
– use of the mechanism of public procurement for 
innovative products; 
– establishment of preferential tax conditions 
and application of preferences for companies that 
produce innovative products; 
– use of compensation of expenses to entrepreneurs, 
starting from the first three years of operation 
of the business incubator (60%, 40% and 20%, 
respectively).

Block 4. Differentiation of sources of financing 
of scientific and technical and innovative 
activity. Within the framework of the tasks of 
this block, it is envisaged to overcome barriers 
that cause restrictions on budget expenditures 
for scientific and technical activities and the use 
of innovations: 
– development, improvement and implementation 
of regulatory and legal support for the functioning 
of venture funds, mutual investment institutions in 
the field of innovation; 
– consulting support for fundraising, access 
to programs to support the development of 
innovation, international grant programs in the 
field of innovation; 
– application of the mechanism of tax holidays for 
subjects of innovative entrepreneurship; 
– expansion of the list of high-tech critical imports 
of equipment and technologies, without collection 
of import duties; 
– state guarantee and subsidization of interest 
payments on loans issued for export contracts of 
technologies and innovative products.

Block 5. Formation of a system to support the 
development of innovative entrepreneurship at 
the regional and local levels. The tasks of this 
group are focused on overcoming obstacles to the 

effectiveness of the system of support for innovative 
entrepreneurship at the regional and local levels: 
– provision of financial, informational, educational 
support at the expense of local budgets on the basis 
of creation of special funds to support innovative 
entrepreneurship.

Block 6. Formation of a favorable institutional 
environment for innovation. This group contains 
tasks, the implementation of which overcomes 
obstacles to comprehensive legislative support for 
the development of innovative entrepreneurship: 
– development of a national strategy for the 
development of innovative entrepreneurship until 
2030; 
– digitalization of administrative support of 
enterprises, in particular the widespread use of a 
“single window” technology; 
– advanced training of administrative staff through 
seminars, trainings, courses, round tables, etc.; 
– overcoming psychological barriers; 
– introduction of administrative liability for delays 
in making decisions on the implementation of 
innovations;
– involvement of professionals at all stages of 
implementation of innovative projects; 
– creation of a unified system of training and 
advanced training in the field of technological 
innovation, including distance learning; 
– development of a network of “innovative 
business activities” to form a database of contacts 
to establish new contacts between entrepreneurs, 
experts and solve their problems and establish 
effective cooperation in the field of innovation.

Block 7. Improving the information support of 
innovative entrepreneurship. Within this group 
there are tasks to overcome barriers associated with 
lack of awareness of innovative entrepreneurs: 
– provision of free consulting services; 
– providing innovative entrepreneurs with a 
continuous exchange of information, ensuring its 
availability and reliability;
– formation and development of a system of 
information and consulting support for innovative 
entrepreneurship at the national level.

Block 8. Ensuring an increase in the level of 
innovation culture in the field of innovative 
entrepreneurship. This group envisages the 
implementation of tasks to overcome barriers 
associated with the insufficient level of innovation 
culture in the field of innovative entrepreneurship: 
– formation of a positive image of an innovative 
entrepreneur on the basis of popularization of 



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innovative ideas, creative thinking among the 
population; 
– increasing the social responsibility of business. 

Thus, the results of the study indicate the need to 
solve a number of problems for the development of 
innovative entrepreneurship in Ukraine in modern 
business conditions.

4. Conclusions
Innovative entrepreneurship is a dynamic form 

of innovative activity that provides a continuous 
flow of innovative ideas and their practical 

implementation in specific innovative products. 
To intensify innovative entrepreneurship in the 
near future, it is advisable to implement a number 
of measures, the tasks of which cover the following 
main areas of change: a clear understanding 
of the national economy’s ability to innovate, 
create conditions for new products, increase its 
competitiveness; ensuring diversification of sources 
of financing of innovative activity of enterprises in 
order to reduce the costs of acquisition and use 
of innovative products; establishing close and 
productive interaction of the main participants of 
innovative entrepreneurship.

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