In today's world economy, innovation is seen as the main factor of competitiveness and sustainable economic development. In developed countries, small enterprises make significant contributions to the innovative development of national economies by leveraging their competitive advantages in the flexibility and responsiveness of decision-making. The article focuses on the role of small business in sustainable development. The article considers the possibilities of development of small business in the period of innovative economic development. The foreign experience of economic policy with regard to small business was studied, key problems and risks associated with the development of small innovative enterprises were identified and recommendations were made to improve the system of state support for small and medium business, taking into account the peculiarities of its development in the current environment.