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Innovative economy: preconditions and factors of formation and development Dynamic economic growth can be considered an important factor in the country’s competitiveness in the market system. In the process of improvement of the market economy model, priority should be given to development of production on a new technical basis, innovation activity to translate scientific and technological research results into production, creation of new technological processes and restructuring in on the modern scientific and technological basis of all branches concerning material production and the service sector. The purpose of the study is to identify the assumptions and factors regarding the formation and development of innovative economy.