THE ROLE OF SMALL BUSINESS IN INNOVATION DEVELOPMENT OF CHERKASY REGION

Abstract

Small entrepreneurship is an important part of region socio-economic development, providing rationalization and increase the efficiency of resource potential using, formation and development of human capital, accumulation of scientific and technological potential. Small enterprises provide implementation of innovation policy of state as a whole, increasing its competitiveness in the world market. However, innovation activities are characterized by high risk, which is especially relevant for small business, which is vulnerable to changes in the market environment.The purpose of the article is to study the modern tendencies of small business innovative activity in region and the main reasons hindering the development of innovative business activities.In the article the features of region innovative development and its components are considered. There is noted that small business contributes to formation of competitive environment, flexibility and individualization of production, that provides the necessary preconditions for innovations introduction.The basic structural indicators of small business activity of Cherkassy region are investigated. It is detected that share of small enterprises of the region, which produce goods and provide services with high added value and innovative technologies, is increasing. However, according to innovation financing directions, the greatest share is used for machinery and equipment purchase, that demonstrates the lack of entrepreneurs’ interest (in particular, financial) to carrying out scientific and technological research and development. There was founded that the effectiveness of innovation process is decreasing, because the part of innovative products in the total volume of industrial products sold reduced.The main reasons of small business low innovative activity of Cherkasy region are determined. There are: insufficient economic stimulation of investments attraction into innovative processes; limited amount of scientific and innovative activity financing by state budget; imperfection of institutional provision; lack of appropriate organizational and legal conditions for innovation infrastructure development; lack of co-ordinated cooperation at the level of "education-science-business".