This study explores the situation of entrepreneurship, innovation and innovation policy in the Republic of Kosovo. The Republic of Kosovo is the newest state in the South East Europe. By knowing this it s understandable that it has more economic problems than other countries in the region. More than 99% in Kosovo are SME-s. This percentage shows us that the SME-s development has a key role in the economic development of our country. If there are strong innovation policies, there will have new business ideas, new products in the market, new technology usage