The purpose of the paper is to substantiate the need for the introduction of innovations in the activities of business entities and territorial communities. Analyzing, systematizing and generalizing the scientific work of many researchers, it was discovered that innovation is one of the factors of successful decentralization. As a result of the study, the essence of the concept of innovation is shown, which can be considered as the introduction of something "new and improved" or activity that requires a person or community to do something different than before. Elements of innovation capacity are singled out. The peculiarities of investment activity formation in Ukraine are outlined. The basic principles and functions of management of effective work in the field of innovations are determined. The factors of implementation of innovations in the branches, organizations and territorial communities are presented.

It is substantiated that providing citizens' welfare, which occurs through a complex synthesis of factors, is one of those that is in the constant field of view of the socio-economic sphere. Analyzing, systematizing and summarizing the scientific works of many scientists, welfare factors are identified that are important for prospects' understanding of territorial communities' functioning, their role and place in the national economy, conditions that ensure competitiveness, and directions for improving efficiency of activities. At the same time, factors of welfare of territorial communities can be individual and subjective, with different significance for different people, may vary throughout a lifetime, and may also have a direct or indirect impact on each member. So, some people pay more attention to financial wealth, others -to their physical and/or mental health. The following factors of welfare of territorial communities are proposed and described: socio-economic, demographic, legal, political, cultural and psychological. It is concluded that to date, in the context of intensive transformations and reforms, communities' welfare is a product of many and often interconnected factors, understanding the impact of which is important for determining competitiveness of the communities and directions to improve efficiency of activities.

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Now it is important for territorial communities to look for ways to qualitatively improve the welfare of their population. Requirements for the criteria’s formation for a better understanding of how to measure population’s welfare of territorial communities are identified. The state regulation’s need of population’s welfare of territorial communities involves the use of a functional-territorial system of state regulation. This ensures optimal interaction between regional authorities, local governments and the state. It is emphasized that the principle of subsidiarity is basic for the formation of a conscious resident and responsible government, and also local self-government should be subject to state control, so-called «state supervision». To effectively regulate the population’s welfare by the state, it is necessary to understand the influence level of the main factors that determine the living conditions of community residents. The welfare level of territorial communities is analyzed taking into account subjective and objective factors, namely the influence of factor indicators on the effective welfare indicator is determined. The algorithm of state regulation of the population’s welfare of territorial communities (which is the purpose and scientific novelty of this article), which includes the criteria for prioritizing measures of state regulation to improve the population’s welfare of territorial communities at the appropriate which should ensure the strengthening of the bodies’ work of state regulators to preserve existing models of economic development on the basis of the implementation of innovation and investment model. General scientific research methods are used, such as empirical (questionnaire, description) and theoretical (analysis, synthesis, generalization, explanation). The practical significance is that certain provisions of the study can be used in practice, in particular territorial communities, and in the educational process, in the course of teaching, in particular sections of state regulation. Prospects of further research are methodical recommendations approbation for working with territorial communities. Keywords: local self-government, population, territorial communities, welfare factors, state regulation.

It was found that the development of communities provides improved social and economic conditions in the area. It was systematized the mechanism of increasing efficiency in communities and strengthening the influence of the state through local authorities on the ground on the basis of methods of influence. Problems of state regulation in the context of components of sustainable development are identified. The purpose of regulating the development of community territories is determined. It were given the components of ensuring effective state regulation for achieving welfare growth of territorial communities on the basis of the model of welfare analysis of territorial communities. It is determined that the system of state regulation should contribute to the enhanced provision of public goods in the community, improvement of social infrastructure and support of territorial economic development. Strategic mechanisms and functions of state regulation are singled out. The basic system of principles which is necessary for effective state regulation of the territorial communities’ development is outlined, and the directions of government action within the principles are determined. Today's communities need to move from a development model to an innovation model. It was formed the model of effective state regulation of the welfare growth of territorial communities. The necessity of using social partnership and introduction of innovations in the communities’ activity as factors of successful realization of decentralization is substantiated. It is emphasized that social partnership as a tool to increase the communities’ welfare provides: increasing the level of population income, reducing poverty and developing social assistance. In particular, the priority way to improve state regulation of the welfare growth of territorial communities is the legislative implementation of a development strategy of smart specialization on the ground which provides comfortable living conditions that characterize the modern welfare of territorial communities’ citizens.