Innovation as a factor (determinant) for sustainable development of SMES in the knowledge-based economy

The innovation in a company allows for the extension of its market product or service range and for the adjustment of this offer to the needs of its customers. Nevertheless, the range and speed of innovation in small and medium enterprises is restricted in comparison to large enterprises which typically have their own research and development infrastructure, as well as the financial means to allow for extensive research. "Innovation is not a guarantee of success, it is a chance. ...leading companies develop the wallet of innovation, which others can take from in order to sustain their own growth" [1]. <br> In this article the knowledge-based economy is described and the determinants for sustainable development of SMES are presented. Consequently, the innovation in SMEs as the one of the factor for sustainable development of SMES in the knowledge-based economy is defined. As the result of our research the model of sustainable development of SMES in the knowledge-based economy based on innovation is formulated.