The relevance of the research topic is based on the fact that creating economic opportunities for growth through a reasonable macroeconomic policy, intelligent investments and structural reforms is the number one priority as well as increasing the number of jobs in the entire EU. Structural and investment funds belonging to the EU are the main instrument of investment. In all countries, they are the most important factor for economic transformations, the key to the main purpose, which generates growth – innovation, digital technology, and support for SMEs. This article is based on extensive research based on theoretical work by Eisenberg (2010) on innovation, Day (1972) and Sebatier (1986) on state policy, and Cantwell and Mudambi (2000), Etzkowitz (2008) on innovation state policy. Strategies implemented in many countries follow a similar model in order to be successful in creating an ecosystem that would facilitate the development of companies that would generate innovation in products, services and processes. The results of the economic development of the EU regions are related to the creation of a productive cluster of highly innovative and competitive organizations. Research goal: to analyze theoretical and practical aspects of foreign experience of regional economic development. Subject of the research – innovation, ecosystem, local self-government in the context of regional economic development. Objectives of the study: 1) to reveal innovations as competitive advantages of regional and economic development and their role in the formation of innovation ecosystem; 2) to analyze the strains of development of innovation and creative state policy; 3) to investigate the conceptualization of the formation of innovation ecosystems of a smart city. Research Methodology: general philosophical methods – analysis and synthesis, comparisons, historical and logical, systemic and cross-cultural analysis, which helped to reveal the essence of innovation as a competitive advantage of the regional economic development of the regions and their role in the formation of innovation ecosystem. The research conducted allowed us to conclude that a very important role in this process is played by regional and local authorities, which determines the direction of development, supports measures aimed at the development of innovative economy in the region, for example, through projects of cooperation between science and business. The joint implementation of companies and research units projects allowed to improve the barriers in contacts between these cooperatives and change the awareness of businessmen and contribute to the strengthening of trust in public structures. The practical significance of the research is that local self-government bodies contribute to the implementation of a reasonable macroeconomic policy, implementation of reasonable investments and structural reforms.