The aspects of entrepreneurship and innovation development of SMEs

Development of business activities is in accordance with economic priorities of state, formulated into the frames of long-term strategy of economic of Latvia. The problem of innovative development and growth is actual for small and medium sized enterprises. Skills and innovation have been the Latvian government’s priority for the past few years, giving SMEs opportunities to fund creation of new products and services, up-skill and re-skill labour force and transfer knowledge and technologies from scientific institutions to SMEs. An increase in the number of young companies with a high level of growth potential, as well as the development of an entrepreneurial environment and a startup ecosystem will play a significant role in the development of small and medium-sized businesses. The purpose of this article is to show the state of innovative development of small and medium-sized enterprises in Latvia through the dynamics of the innovation index in the context of the EU. According to the European Innovation Scoreboard, Latvia is among the countries that have made progress from modest innovators in 2011 to moderate innovators in 2017. Latvia showed positive dynamics and growth of the total innovation index from 48 points in 2011 to almost 66 points in 2018.