THE REVIEW OF EXTERNAL SOURCES OF INNOVATION FINANCING

One of the key factors influencing the potential success of innovation is that of providing adequate sources of financing during the whole 12L (idea-to-launch) process. Available financial sources enable companies to conduct innovation activities in general (R&D and non-R&D activities), as well as to bring the output of the process to the marketplace. Having this in mind, it is very important for different business and economy levels, to allocate various sources of financing innovation projects if they want to experience development and growth. One of the potential factors hampering the possibilities of successful innovation financing is lack of intermediary where all kind of companies can get information about ways of financing, about good practices and other data which should be available. In this paper we tried to designate and explain the most common sources of financing innovation by analyzing accessible data; to emphasize the importance of various funds of financing (e.g grants, business angels, venture capital (VC), tax incentives, bank loans etc.) that should exist in one innovation ecosystem; to describe the main actors involved (e.g. government) and what they can do to improve the situation on the capital market in order to boost investments in innovation. Additionally, the paper gives an overview of identified external sources of financing innovation in Serbia.