State Policy on Encouraging the Population to Start Economic Activities

Abstract

Problem setting. The relevance of the topic is driven by modern challenges faced by society in the context of innovative development and the need to stimulate economic growth through novel approaches in various sectors. Startups, as an effective tool for creating new products and services, play a key role in ensuring economic competitiveness at both the national and international levels. The successful development of a startup ecosystem contributes to addressing socio-economic issues such as job creation, attracting investments, developing innovation infrastructure, and integrating Ukraine into global technology markets.

The issue of legal regulation of startups has gained particular importance under martial law. It is closely linked to the lack of a clear and transparent funding process, as well as mechanisms for further monitoring and evaluating their activities. Currently, Ukraine’s regulatory framework includes certain mechanisms for supporting innovative projects, such as grants, microgrants, and state funding. However, many unresolved issues complicate startups’ access to financing. The criteria for application evaluation, the decision-making process for fund allocation, and the role of various state and private entities in this process remain unclear.

Purpose of research. The purpose of this article is to examine the conceptual and legal foundations of startup operations and their role in stimulating innovative economic development. This section analyzes the key stages of the startup life cycle, mechanisms of state and private support, and the regulatory framework governing startup activities.

Analysis of recent researchers and publications. Among foreign researchers who have made significant contributions to the study of startups and their development, notable figures include Steven Blank, Eric Ries, James Guzman, Scott Stern, Peter Thiel, Rosa Passaro, Ignazio Quinto, Paolo Rippa, Alfred Chandler, Philip Kotler, and Richard Florida. Their research covers topics such as the startup life cycle, innovation management, venture funding, the creation of startup ecosystems, and business model implementation for scalability.

Among Ukrainian researchers studying startup development and support, key contributors include Yu. V. Heorhievskyi, S. V. Hlibko, K. V. Yefremova, K. O. Kvitko, V. P. Kokhan, I. V. Podrez-Riapolova, O. V. Rozhon, I. A. Selivanova, N. V. Starodubets, L. O. Shkvarchuk, A. T. Chupryna, and others. Their work forms the foundation for understanding the regulatory framework of startups, the implementation of innovation activities, and the development of appropriate infrastructure in Ukraine.

Аrticle’s main body. The article examines state policy on encouraging economic activity in response to modern challenges of innovation and economic transformation. The topic’s relevance stems from the need to create a favorable environment for launching innovative projects, enhancing Ukraine’s economic competitiveness. The study explores the conceptual and legal foundations of startups, their life cycle, and state and private support mechanisms essential for implementing innovative ideas.

The author highlights the issue of startup regulation, which is particularly critical under martial law due to unclear application evaluation criteria and opaque funding processes. The analysis of Ukraine’s regulatory framework, including the Law "On Innovation Activity," government resolutions, and Ministry of Economy orders, reveals both existing support mechanisms and gaps limiting business access to resources. The article contrasts startups with grants, emphasizing that startups are entrepreneurial entities, whereas grants are targeted financial instruments with strict usage requirements.

The study outlines key financing stages, from electronic application submission via the "Diia" portal to preliminary analysis, innovation potential assessment, and decision-making by competent authorities. It examines support models based on foreign and domestic research, identifying prospects for modernizing regulations and establishing a unified national platform to centralize information on grants, investments, startup schools, incubators, and accelerators.

Special attention is given to audit mechanisms and financial oversight to ensure transparency and efficiency in state support. The proposed recommendations focus on improving application evaluation criteria, refining monitoring systems, and increasing independent expert involvement. The study’s practical significance lies in developing a comprehensive approach to fostering innovation, facilitating Ukraine’s integration into the global innovation ecosystem, and ensuring sustainable economic growth.

Conclusions and prospects for the development. The startup financing mechanism includes key stages: application assessment, compliance verification, funding decision-making, monitoring of fund usage, and performance evaluation. The Ukrainian evaluation system, regulated by legal acts, requires greater transparency and efficiency.

A unified national platform consolidating funding opportunities, grants, training programs, and investment access would streamline processes, reduce administrative burdens, and integrate Ukrainian startups into the global innovation ecosystem.

Effective startup support requires legal regulation, financial assistance, infrastructure development, and a favorable business environment. These measures will foster startup growth and enhance Ukraine’s economic competitiveness.

The study’s findings highlight the need to refine regulatory frameworks, improve evaluation mechanisms, and strengthen independent oversight. Financial and organizational support—grants, investments, mentorship, and startup schools—are critical for market adaptation and sustainable innovation. Coordination between state institutions such as the Ministry of Economy, the State Employment Service, and the Ukrainian Startup Fund is essential, considering their distinct roles and regulatory powers.