IMPLEMENTATION OF INNOVATIONS IN THE ACTIVITIES OF SOCIALLY AND ENVIRONMENTALLY RESPONSIBLE SMALL AND MEDIUM-SIZED ENTERPRISES

Abstract

The article examines the implementation of innovations in the activities of socially and environmentally responsible small and medium-sized enterprises (SMEs) amid global economic transformation and rising requirements for sustainable development. The relevance of the research topic is confirmed by the growing role of SMEs as powerful drivers of economic development, ensuring a significant share of employment, value-added creation, and a competitive environment, while also exerting a considerable impact on the environment. The study aims to substantiate the theoretical and methodological foundations and to develop practical recommendations for implementing innovations in the activities of socially and environmentally responsible SMEs.

The article examines contemporary approaches to the interpretation of environmentally oriented innovations, particularly within the framework of the sustainable development concept and international organizations' approaches, which integrate environmental, social, and economic components into enterprise management systems. The approaches to classifying environmental and socially oriented innovations are general, encompassing product, process, marketing, and organizational changes. It is substantiated that implementing innovations in SME activities increases resource efficiency, reduces negative environmental impact, optimizes production processes, and creates sustainable competitive advantages. The key characteristics of environmental innovations are systematized, and their impact on enterprise economic, social, and environmental performance indicators is determined. It is revealed that, despite the high innovation potential of SMEs, which is enabled by their flexibility and adaptability, there are a number of systemic barriers, including limited financial resources, insufficient technological development, weak integration into innovation infrastructure, and a shortage of qualified personnel. The study of SME functioning features has enabled the identification of an asymmetry in opportunities for innovation implementation compared to large enterprises. The necessity of forming comprehensive mechanisms to stimulate innovation activity in the SME sector is substantiated, including financial, tax, institutional, organizational-economic, digital, and educational instruments. The effective combination of these mechanisms will intensify innovation activity, increase the investment attractiveness of SMEs, and ensure their integration into modern innovation ecosystems.