A NEW ECONOMIC MECHANISM IS A PREREQUISITE FOR THE INNOVATIVE DEVELOPMENT OF THE STATE

Abstract

The article is devoted to the review of economic system as an organic integrity that develops according to its internal objective laws. The article substantiates the innovative development as an essential condition for surviving in global economic space, analyzes the innovation state of economy in pre-war Ukraine, determines the reasons for the low-level development of new technologies in the country, that are hidden in the weak technical equipping of the working population, presents the data about rapid physical and moral depreciation of the material and technical base in all the spheres of national economy in the country. The problem of business entities lack of economic interest to invest in innovation is also considered, primarily due to the fact that venture investments are meant, that is, investments with a high degree of risk, limited financial capability of potential investors, as well as insufficient assistance from the state due to the imperfect economic and financial policy, being the result of the underdeveloped economic mechanism as such. The article reviews the evolution of the formation of a modern efficient economic mechanism, where the state cooperates with corporations and other economic entities that can be seen in the combination of planning in the form of various techniques and existence of the market and economic interest of its subjects. The world experience of state support and implementation of new technologies that increase the labour productivity is studied, and the economic mechanism of different countries is considered, that stimulates the transition of the economy to an innovative model of development, which is extremely important in the post-war period for the formation of many elements of the economic system from the ground up. As recommendations, the article highlights the necessary actions on the part of the state for the transition to a new economic mechanism and the main directions of innovation policy in Ukraine. The importance of the formation of new institutions that will promote the development of new technologies in the country and the formation of innovative infrastructure, as well as the adaptation of the financial system to support these institutions, is noted. The importance of providing state protection of intellectual rights as one of the crucial conditions for the innovation development in Ukraine is highlighted.