Policy makers recognise the importance of innovation and entrepreneurship in today’s knowledge-driven economy, and the need to encourage SMEs to engage in innovative activities. The Eastern Partner (EaP) countries need active government support for small business training programmes and entrepreneurial learning, innovation and technology absorption to develop new sources of economic growth.Principle 8 of the Small Business Act (SBA) provides a framework to analyse and evaluate policies to develop entrepreneurial human capital and support innovation in SMEs. It has two main dimensions: Enterprise skills, and Innovation. The systematic promotion and investment in enterprise training and support through structured policy partnerships and evidence-based policy approaches can anticipate human capital supply needs for the SME sector. The innovation dimension focuses on creating a favourable environment for innovation and technology transfer through institutional co-operation, a strategic approach, establishment of innovation and technology centres and development of technical and financial support schemes for innovative SMEs.