National innovation systems and governmental financial instruments for supporting innovations – approaches of Central Asian countries

This paper analyses the existing knowledge base on innovationfinancing, the role of government funding for supporting innovation, the development of sustainable financing systems for innovative processes, and interaction between public finance and sustainable innovation in a society. The paper presents a comprehensive research of the relationship between govern-ment regulation tools and innovation processes; thus highlighting several lessons for policy makers. The study proposes a unique scheme of innovationfinancing, which could be used for building an effective financial mechanism for supporting sustainable innovation process. Finally, the paper aims to determine the roles, principles and boundaries of state involvement in the innovation field, especially focusing on the use of public funds.