A New Mechanism for State Support to Technological Innovation for Industrial Development

Abstract

Although innovation is defined as a priority in the strategic documents of the Ukrainian government, its trends of 2006–2016 show that nearly 80% of the Ukraine’s industrial enterprises were not innovating. Innovation activities were carried out mainly by large enterprises, of which 4–5% created new products or improved existing products (processes). 80–85% of innovations were acquisitions (mainly imports) of ready technologies in form of machinery; 95–100% of the innovations costs were covered by companies’ own funds. Such results give evidence of the inefficiency of the current system of government support for innovation and the need to change approaches to financing development and innovation. The authors are first to propose a mechanism for government support to the implementation of industrial-innovative projects at domestic industrial enterprises, which involves co-financing of project implementation and partial compensation of interest on loans involved in project implementation. The criteria for applicant and project compliance and principal indicators of the industrial-technological and financial-economic expertise of projects are determined. The procedure for providing government support to industrial-innovative projects is proposed, which implementation will allow for social and economic effects: higher level of production localization and more jobs in Ukraine, higher added value of production; stimuli to the development of related industries; increased revenues to budgets of various levels; technological effects: building scientific and technical competencies and technology development, grown competitiveness of the domestic industry, created objects of intellectual property rights, created scientific and production clusters; market effects: access to foreign markets, import substitution and lower dependence on imported supplies (primarily from the Russian Federation), supplies of intermediate goods (materials, units, units, parts and components) to end-product manufacturer, supplies of investment goods (means of production) to business entities, higher profitability, higher flexibility of production, higher labor productivity, better consumer quality of manufactured goods; environmental effects: saved material resources, reduced energy consumption, reduced production waste, reduced pollution.

Keywords

• technological innovations, industrial innovation project, complex examination, state support, public-private partnership