What is European Social Fund (ESF)

The main goal of the chapter is to make an assessment of the innovative position, the level of internationalization and potential of small and medium-sized enterprises in the EU in the light of challenges implied by the building of knowledge-based economy. The chapter comprises several parts. Main attention is paid to the substance and factors that shape the knowledge-based economy, determinants of innovation in SMEs and the assessment of SMEs' innovation and internationalization in the EU. We also analyzed dependence between the development level of the EU Member States and R&D expenditure and the level of innovation and competitiveness of individual countries. To this end we used Spearman's rank correlation coefficient. Final part of the chapter is devoted to the EU support scheme for small and medium-sized enterprises, in particular it focuses on instruments connected with innovation and internationalization.