The paper focuses on innovative activities of small and medium-sized enterprises (SMEs) in the Czech Republic. The purpose of the article is to fill the gap in the knowledge of general innovative behaviour of SMEs in terms of their perception and real doing inside of companies as well as the manner of innovation management in this business segment. What also remains less surveyed (compared to the large or multinational companies) are the areas in which innovation primarily take place in SMEs and the main motives for innovation activities. The aim of the research, therefore, was to map general attitudes of SMEs to innovation and the manner of innovation management in this segment in the Czech Republic. Another aim was to identify common areas in which innovation take place in SMEs most often as well as to predict the trend of innovation development. Given the often limited funds allocated to innovation in SMEs, the paper also contains part of research results determining the SMEs' view of tax relief in implementation of innovation. The research questions were what importance SMEs attribute to innovation in general and whether the innovation process is not underestimated in them, because the segment of research and technology-oriented SMEs is still considered relatively underdeveloped in the Czech Republic. The results of the presented research and compilation of further surveys where the author of this article participated bring new insight into the SMEs’ manners in innovative doing, revealing the internal preferences, drivers and also constraints the small businesses have to deal with. The dominant method of survey was quantitative survey among 514 SMEs. The research concludes that SMEs are aware of the importance of innovation for business and competitiveness, but they approach innovation management and planning in a rather unsystematic way. A capacity barrier plays an important internal role in particular in SMEs; it is manifested as engagement of personnel capacities in ongoing projects, where it is very difficult to find space for systematic research activities. This is faced by a large part of medium-sized companies, which otherwise have a very good innovation potential. Significant findings are also directed in the area of drivers (motives) for innovations, where customer preferences, availability of funding and competitors' actions prevailed. The paper also discusses institutional barriers with influence on SMEs' innovative activities, which seem to be considered as a significant constraint in the Czech Republic. Dominant area of innovation in SMEs is connected with services and marketing. Since specifically these areas are the most dynamically developing nowadays further research on detailed forms and manners would be useful to be able to support SMEs more systematically in their innovative activities.