The object of research is the process of state regulation of innovation in small businesses. The purpose of research is development of theoretical and methodological provisions and practical recommendations to enhance the innovation activity of small enterprises on the basis of scientific justification the instruments of state regulation. Methods of research are theoretical synthesis, structural and logical analysis, a priori ranking, simulation, regression analysis, the method of analysis of hierarchies; PEST-analysis. Methodological provisions for the organization of government regulation of small innovative enterprises, which, unlike existing ones, provide tools and state regulation of small businesses, which have different functions in the innovation process, enabling efficient use of financial and institutional resources of the state; methodical approach to evaluating the effectiveness of tools of state regulation of innovative small businesses, which, unlike existing ones, based on the calculation of the effect of incentives provided at two levels: at the enterprise level and the state level, which allows to balance the interests of both parties in the development of innovative policy, are got further development. Methodological position to justify state regulation tool of innovative activity of small firms which, unlike existing ones, taking into account the ratio of benefits and losses of the state from implementation tools that allow for innovation policy design stage to predict and minimize future negative environmental impacts; methodological approach to assessing the conditions of the process of state regulation of small innovative companies which, unlike existing ones, based on the use of indicators that reflect the nature of its environment, which gives an opportunity to identify strengths and weaknesses, set priorities and instruments of state regulation of innovation small businesses; the classification of innovation by supplementing it with a new feature, which, unlike existing ones, account functional characteristics of small businesses as an independent subject of the innovation process, which will specify the contents of innovative activity of small firms and its recognition as a special object of state regulation, are improved. Research results are used in the Main Department of Economics of Kharkiv Regional State Administration (sertificate number 71/1 of 07.02.2012), in the work of Research Center of Industrial Development Problems of NAS of Ukraine (state registration 0109U007958) (reference number 18/5 of 17.01.2012).
