Paper Contents
Abstract
Innovation serves as a fundamental requirement for economic development in the long run, yet its extended period of uncertainty results in a major financial gap. The research analyzes the changing financial environment for innovation by categorizing Sources into Internal and Public, and Private Risk Capital, and Methods into Policies and Intermediaries, and Modern Mechanisms which include Venture Debt and Blended Finance, and Advanced Market Commitments.The evaluation demonstrates that traditional debt instruments lack the ability to support radical innovation activities. The most effective policy approach targets particular market failures by providing R&D tax credits to small businesses and Innovation Vouchers to address knowledge-linkage problems. The research demonstrates how Venture Debt provides strategic value to growing businesses and Blended FinanceAMCs enable public capital to support large-scale societal changes through climate technology financing.The core finding is that bridging the innovation funding gap requires a shift from generic subsidies to a systemic, mission-oriented approach. The development of effective policy requires both market intervention and the correct alignment of financial tools to the particular risk characteristics and development phase of the innovative project.
Copyright
Copyright © 2025 Umidjon Khoshimov. This is an open access article distributed under the Creative Commons Attribution License.
