FINANCIAL SUPPORT OF INVESTMENT ACTIVITY IN THE CONTEXT OF MODERN CHALLENGES FOR UKRAINIAN ECONOMY INNOVATION DEVELOPMENT

Abstract

The article analyzes the main theoretical approaches to the interpretation of the essence of the financial security of investment activities and provides a new definition, alongside this its basic forms and methods are identified.

In the broad sense, the author defines the financial security of investment and innovation activities (then - IIA) as managing the process of searching for, forming, allocating and using the necessary amount of financial resources to fully satisfy the needs of business entities in the implementation of effective IIA. However, in a narrow sense, financial support involves initiating, structuring and stimulating the process of mobilizing financial resources from various sources for the purpose of their profitable usage. Regarding the forms and methods of financial assurance of any socio-economic sphere, these are specific ways and actions that ensure the allocation of resources to those areas of the economy that will produce the greatest economic effect in both quantitative and qualitative terms. The article studies that the financial support of IIA is carried out in stages, each stage characterized by different levels of risk and, accordingly, possible sources of funding - public, private and mixed funding sources according to the diversity of its models and stages. Traditional forms of mobilization and using financial resources at different stages of the IIA are: receiving funds from budget sources and programs; obtaining loans, borrowing or loans in banks and other financial institutions; attraction of funds by placing shares on the stock market; attraction of direct and venture investments. Increasing of the financial encouragement of investments in the modernization of production and financial system leads to the possible ensuring the transition to the innovation development of the entire economy.

Likewise, the author analyzes the dynamics of the development of the index of capital investments by types of economic activity and their influence on the share of gross fixed capital formation in Ukraine during 2010-2017.

As the result of the study, it was determined that in industry and agriculture, which together provided 47.8% of the total volume of capital investment, investment activity was steadily declining throughout the period under study. In particular, the growth of capital investment in manufacturing industry at the end of 2017 amounted to only 3.8 %, in agriculture, forestry and fisheries - 150%, simultaneously investment in construction decreased by 28.0%, and reduction by 21.2%, 31.4%, and 41.5% appeared in trade, transport, professional and scientific activity respectively. Investments in all sectors of the social sphere also sharply reduced due to budget constraints: professional, scientific and technical activities - by 64.7%, education - by 11.4%, but in health care and social assistance - grew by 111.1%. This leads to a narrowing of the possibility of human capital development as a basic factor in the formation of an innovative economy.

To summarize, the financial support of investment and innovation activities is the strategic task of the state, the basis of which is a stable financial system, and the necessary conditions include a stable regulatory and legislative base, favorable IIA conditions, a well-balanced state policy on IIA financing, human capital development, concentrated efforts to ensure investment attractiveness at all levels of the economic system.