A paper seeks to justify a need for the better development of sustainable innovative entrepreneurship by public policy initiatives. It takes into account two sides of this issue going from the main challenges of business innovation activity to the possible public policy actions necessary to improve the existing situation. The main focus of this paper is directed on the improvement of current Lithuania's innovation policy for the more effective business innovation promotion. Moreover, a concept of the innovative entrepreneurship is also discussed here as a foundation of the linkage between innovation and entrepreneurship policies. The research is based on the interpretative, systematic and comparable analysis of the quantitative and qualitative data. The paper provides the results of Lithuania's innovative enterprises survey performed by the author. The findings include the issues related to the innovative business needs and the role of innovation policy actions in the promotion of this kind of business.

The article seeks to justify a need and possibilities to form Lithuania's innovation performance measurement framework in terms of existing international practice. To do so different analytical tools, known worldwide in innovation fields, are discussed and the main categories of the assessment are summarised. Taking into account the various instances from the index practice, Lithuania's innovation performance results and their tendencies in comparison with other countries are analysed. To conclude, several suggestions are drawn for the measurement framework of the Lithuanian innovation policy.

Insufficient business innovation activity in Lithuania shows a need to explore possible factors determining this state of play. It is assumed that lack of concrete and specifically targeted government actions or their efficiency is extremely important here. Thus, in order to analyse business innovation promotion in Lithuania, theoretical, strategic and statistical data are taken into consideration. This paper suggests the generalised theoretical system of business innovation determinants, analyses the statistics describing business innovation activity in Lithuania, and provides an assessment of the current Action Plan of Lithuanian Innovation Strategy for 2010-2020 from a business innovation promotion perspective. JEL Classification: O31.

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