The aim of the article is to identify the dynamics of innovation activity among Ukrainian business entities and to reveal the emerging trends amid national and global challenges. Analysis results. The research presents a comprehensive analysis of the Global Innovation Index (GII), indicators of innovation activity and efficiency, and the sectoral structure of innovation development for the period 2017–2024. Ukraine demonstrated its best GII results during the pre-war period (ranked 50th in 2017 and 43rd in 2018), while the war period saw a decline (from 57th place in 2022 to 60th in 2024), mainly due to delayed reforms and the impacts of the war. Ukraine's strongest performance lies in knowledge creation and technology outputs (25th place in 2020, 34th in 2024), indicating high scientific and educational potential. At the same time, the greatest weakness is found in the institutional environment (107th in 2024), which has been deteriorating annually, pointing to insufficient state support for innovation and regulatory inefficiencies. An analysis of innovation activity shows a decline in the share of industrial enterprises implementing innovations – from 14.3% in 2017 to 5.4% in 2021 – with a slight recovery to 6.5% in 2023, still significantly below pre-war levels. Internal corporate funds remain the primary source of innovation financing, accounting for 78.9% to 88.2% of the total. Government funding and foreign investment continue to be limited and unstable. The dynamics of innovative product implementation also reveal a downturn in 2021 and a moderate recovery in 2022–2023, linked to the economic consequences of the COVID-19 pandemic and martial law. The share of innovative products in total output peaked in 2020 (1.9%) but dropped sharply to 0.5% in 2023 due to the destruction of production facilities and supply chain disruptions, forcing businesses to focus on essential goods. A sectoral analysis of innovation activity highlights the leadership of the IT sector (around 40% of all technological innovations) and significant growth in the agricultural sector (investments in agri-tech startups increased by 45% in 2023). Conclusions and directions for further research. It was found that, despite reduced investments and the loss of technical expertise, martial law acted as a catalyst for the development of specific innovation areas, such as military technologies, cybersecurity, medical solutions, logistics innovations, and renewable energy. Key trends include the digitalization of processes, the advancement of defense technologies, environmental transformation, and the adoption of artificial intelligence.It is substantiated that innovation remains a key driver of Ukraine’s economic growth. Despite substantial geopolitical and economic challenges, Ukrainian innovative companies and startups continue to evolve and attract foreign investment. The scientific novelty of this study lies in its comprehensive analysis of Ukraine’s innovation landscape under the unprecedented conditions of war and digital transformation, with the identification of key trends. The practical significance of the study lies in identifying the strengths and weaknesses of the national innovation ecosystem, which can serve as a foundation for shaping an effective innovation model capable of ensuring sustainable economic development, technological modernization, and integration into global value chains. Further scientific exploration is required to develop mechanisms for adapting innovation-driven enterprises, including the transformation of business models, production and management processes, and risk response strategies. This will enable the formulation of actionable recommendations to enhance the resilience and flexibility of companies in conditions of high turbulence.
Mykhailo Bilukha (Thu,) studied this question.