Abstract
This paper investigates the determinants of innovation in small and medium enterprises (SMEs) in the Czech Republic. This state has undergone an economic transformation and institutional change leading to the establishment of the new approaches to entrepreneurial activities and now must deal with the consequences of the global economic crisis.
Our case study is based on the questionnaire research of 1144 Czech SMEs. We find a number of significant determinants for innovation: research and development, investment in technology, improving the quality of products, or participating in foreign markets.
Moreover, bureaucratic obstacles for innovation and external determinants with adverse effects did not come through as important difficulties for innovative activities in SMEs .