| Summary: | Innovative activities of small and medium-size enterprises (SMEs) in rural areas and in Czech economy are relatively unexplored areas. Socioeconomic and environmental contributions of SMEs activities can be gained not only by means of ecological innovative activities of rural SMEs. Rural areas are also a suitable localization strategy for obtaining public money from subsidies, as there is no great direct competition and lower costs. SMEs economic contributions are irreplaceable both for urban and rural areas. Socioeconomic impact of ecological innovations for urban and rural areas is connected with the advantages of circular economy, such as reduced energy consumption, less pollution and waste, and well-organized product recycling options after use. The hypotheses are focused on the localization of businesses into rural areas, size of enterprises introducing innovations in the market, and ecological product and processes innovations. Estimation is based on 4 innovation phases as in the case of the general innovation business process. The 2014 data set is provided by the Czech Statistical Office contains the Community Innovation Survey. The results for 2014 indicate that localization does not affect the first phases of the innovation process, and that the innovative activities increase the costs of the R&D activities.
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