This article focuses on innovation approach in terms of its perception and management in small and medium sized enterprises (SME) primarily in the Czech Republic (CZ). The purpose of the survey was to map their general approach to innovations and the way of their managing internally in this segment of companies. Further aim was to find and discuss the most common areas in which innovations occur in SMEs, as well as to identify the development direction of innovation in these areas. Dominant research method was quantitative survey on the sample of 514 SMEs operating in CZ. Another base this article lies on is the compilation of few previous surveys, and data from approved expert analysis. The research question that the investigation should have answered, was what importance innovations have in SMEs in general, and whether the innovations (perception, approach, management) are not underestimated in this segment of companies, as segment of R&D and technology-oriented SMEs has been considered to be relatively underdeveloped in CZ. Results of the survey show that SMEs are well aware of importance of innovations for their business and competitiveness, but the approach to their management and planning is rather non-systemic. Significant findings also point out the criteria that are important for planning innovations (where customers‘ preferences prevail), availability of finance, and the steps of competitors.