Financing innovative activities implies the inclusion of interconnected elements that are hierarchically subordinate and specific functional features, as well as sources of financial resources, control mechanisms, accumulation and return mechanisms advanced in investment processes. As the most important generalizing indicator that allows you to determine the final result of activities in the field of innovation, there is an increase in the return on finance from the implementation of innovative projects.
Financing innovation is inherently an activity to attract, subsequently use and distribute capital, as well as to manage risky investments in the market. At its core, financial support is reflected in the functional areas of the impact of the financial sphere on innovation from the perspective of relations such as reproduction, distribution and control. If we talk about the reproductive function, then we are talking about the fact that financial resources become an incentive for the movement of investment capital at all stages of the turnover of innovative investments. The distribution function consists in the formation and use of financial funds to ensure the effectiveness of the capital structure from the position of the state monetary policy at the micro and macro levels, as well as from the point of view of the need for funds of the subject of innovation. The essence of the control function is to monitor the real turnover of finance in the field of innovation, and is implemented in the form of control of the conditions for the formation of innovations, financing of innovations, as well as changes in financial indicators, cost of payments, as well as the calculation of the customer and innovative enterprise. The essence of financial monitoring is to identify the relationships between the structure of financial funds funds with the intended goals of innovation, and also makes corrections between the income and expenses of the innovator. In addition, the monitoring tasks are to determine the futility of the funding environment and identify other ways for innovation.
The financing of innovation determines the following possible sources of capital: own funds of a company interested in innovations, funds from the local, regional and central budgets, foreign investments, which are presented in the form of financial participation in the authorized capital, or other participation, loans from foreign investors or commercial banks.
Budget financing of innovation
The Russian federal budget acts as the main instrument of state scientific and technical policy, and also as the central link of the federal system. Through it, up to forty percent of the country's total income , which was received by the owners of production assets, is distributed. The budget provides government funding for many areas of the economy and public life, the activities of which are not supported by the work of the commercial sector of the economy due to low profitability. The government annually provides financing of innovative projects in the formation of the state budget according to the relevant sections of the classification, in particular for the implementation of highly efficient projects, the placement of which is carried out on a competitive basis. When financing priority innovative projects, the state acts as a kind of business entity. Government interest in innovation due to the need for basic research, which is almost not carried out by private business due to the long implementation period, as well as the uncertainty of the results and costs of implementation.