Theoretical and methodical approaches to the definition economic essence of innovation and its subsystems

In today's globalized world, crucial factors of functioning of the economic system are competitive advantages. The key for competitive advantages are effective innovative activity. The basis of its implementation is knowledge of the mechanisms of formation and implementation of innovative processes. Thus, in the work were traced and analysed approaches for determining of the economic categories: “innovative activity”, “innovation process”, and “innovation”. In addition, in the article were generalized theoretical knowledge's for making concept of their functioning.