STARTUP COMPANIES IN THE CONTEMPORARY INSTITUTIONAL FRAMEWORK OF INNOVATION ACTIVITIES OF SMALL AND MEDIUM-SIZED ENTERPRISES

Abstract

This article investigates the key characteristics of innovation activity of small and medium-sized enterprises (SMEs) as a primary source of radical innovation and a fundamental structural component of global scientific and technological advancement within the world economy. The study delineates the core competitive advantages of SME-driven innovation and highlights the distinctive features of their innovation strategies in comparison with large corporate business structures. It is substantiated that SMEs’ specialization in the development and market commercialization of knowledge-intensive products and breakthrough technological solutions constitutes a significant driver of technological upgrading and structural transformation of traditional sectors across national economies worldwide. The article elucidates the role, positioning, and competitive advantages of startup companies within the contemporary institutional architecture of SMEs’ innovation activity, conceptualizing startups as a specific organizational and economic form of innovative entrepreneurship operating under conditions of pronounced market volatility and heightened investment uncertainty. It is demonstrated that startup firms simultaneously function as generators of novel scientific ideas and disruptive technological developments and as catalysts of enhanced dynamism, flexibility, and adaptive capacity in SME innovation processes. The position of startups within national innovation systems is identified, and their systemic linkages with universities and large corporate enterprises are examined. The analysis substantiates the pivotal role of diversified financing mechanisms, effective regulatory and institutional frameworks, advanced innovation infrastructure, access to mentoring networks, as well as sophisticated marketing and branding capabilities in fostering startup development. Furthermore, it is established that institutional platforms for university-based startups facilitate the effective collaboration of research teams in generating breakthrough innovations in priority domains of global scientific and technological progress, transforming these innovations into viable business projects, and mobilizing external funding from a wide range of investment funds and private investors.