The study investigates the stages and features of privatisation in Ukraine. it describes the impact and consequences of privatisation on the economic potential of the country. The main features and problems of the privatisation process in Ukraine are identified. Theoretical and practical analysis of the consequences of privatisation of state property on the innovative development of Ukraine's economy has been carried out. It was established that the withdrawal from state ownership by means of privatising enterprises is a challenge that negatively affects innovation activity, because it is mainly associated not with the creation of "know-how" to ensure economic development, but with encroachment on material resources states with the motive of enrichment, which leads to the cessation of development and introduction of existing (often imported) technologies and, as a consequence, threatens the internal innovation potential and national security of the country. The proposed ways to reform the privatisation process are aimed at mitigating the consequences of unfair privatisation to strengthen the competitiveness of the national economy, its innovative development and improve the social situation of citizens of Ukraine.