Financing of innovation activity

Financing of innovative activity implies the inclusion of interrelated elements, consisting of hierarchical subordination, and specific functional features, as well as sources of receipt of financial resources, control mechanisms, mechanisms of accumulation and return of funds advanced to investment processes. As the most important generalizing indicator, allowing to determine the final result of activity in the field of innovations, the growth of the return of finance from the implementation of innovative projects is advocating.

Financing of innovation activity is inherently an activity for attraction, subsequent use and distribution of capital, as well as for managing the market of risk investments. At its core, financial security is reflected in the functional areas of the impact of the financial sector on innovation activities from the perspective of relations such as reproduction, distribution and control. If we talk about the reproduction function, then we are talking about the fact that financial resources become a stimulus for the movement of investment capital at all stages of the turnover of innovative investments. The distribution function is that formation and use of financial funds is carried out to ensure the effectiveness of the capital structure from the position of the state monetary policy at the micro and macro levels, and also from the point of view of the need for the innovator's funds. The essence of the control function is to monitor the real turnover of finance in the field of innovation, and is implemented in the form of control of the conditions for the formation of innovations, financing of innovation, as well as changes in financial indicators, cost of payments, and the calculation of the customer and innovative enterprise. The essence of financial monitoring is to identify the relationship between the structure of funds of financial means with the intended objectives of innovation, and also adjust the inconsistencies between the incomes and expenses of the initiator of innovations. In addition, the monitoring tasks are to determine the lack of prospects for the financing environment and to identify other ways for innovation.

Financing of innovation activity determines the following possible sources of capital: the company's own funds, interested in innovations, funds from the local, regional and central budgets, foreign investments that are represented in the form of financial participation in the authorized capital, or other participation, loans from foreign investors or commercial Banks.

Budget financing of innovation activities

The Russian federal budget acts as the main instrument of the state scientific and technical policy, and also as the central link of the federal system. It distributes up to forty percent of the country's total income , which was received by the owners of production assets. The state budget finances many spheres of the economy and public life, the activities of which are not provided by the work of the commercial sector of the economy due to insignificant profitability. Financing of innovation projects by the state is annually provided for in the formation of the state budget for the relevant sections of the classification, in particular for the implementation of highly efficient projects, the placement of which is carried out on a competitive basis. When financing priority innovative projects, the state acts as a kind of economic entity. The Government's interest in innovation due to the need for fundamental research, which is almost not carried out by private business due to the long term of implementation, as well as uncertainty of results and implementation costs.