The goal of this study is to identify the problems and barriers that impede the growth and development of small and medium innovative enterprises (innovative SMEs) and suggest ways to overcome them. The main methods of the study include a survey of the founders of innovative companies from Russia and Belarus, as well as expert interviews. The study involved both mature companies and startups. The results of the study indicate that most innovative companies lack personnel with the necessary education and experience. At the same time, the number of researchers is decreasing, and external part-timers are being involved to carry out the research. The innovative activities in the countries under study remain low. The main barriers to the growth of this indicator include the lack of financial resources, the difficulties with raising external financing, as well as the shortage of the professional personnel. A set of measures to financially encourage researchers and tax incentives for innovative entrepreneurship are proposed as the main incentives to increasing the innovative activities.