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Report provides an insight into the characteristics and advantages of small and medium entrepreneurship (SME) as an innovative and progressive sector of development of social oriented market economy. The article analyzes the SME activity in Ukraine and reveals the position of our country compared to other EU countries (Poland for instance) in terms of level of SME development and business conditions for it. The results of the article represented in the innovative model of SME development, which includes the special characteristics of SMEs and factors of influence on it as well as the performance positive effect of SMEs functioning (namely economic and social impacts). The paper suggests recommendations of taking into account the innovative model and distinctive features of SMEs in order to intensify the SME development, firstly in Ukraine. Keywords—small and medium-sized enterprises (SMEs), distinctive features, SME development, innovative model

Innovative Model of SME Development