This article examines the development of innovation activity and the effective use of scientific capacity by entrepreneurial entities, with particular attention to small businesses and private enterprises. In the contemporary economy, business competitiveness depends not only on financial resources and market position but also on the ability to create, absorb, adapt, and commercialize knowledge. The purpose of the study is to identify the relationship between entrepreneurial innovation activity and scientific, technological, human-capital, and institutional capacity. The research applies a systematic and comparative analytical approach, literature synthesis, and conceptual analysis. The findings indicate that qualified human resources, research infrastructure, access to finance, digital technologies, intellectual property protection, and cooperation with higher education institutions are major determinants of innovation performance. University–industry cooperation is particularly important because it can facilitate the commercialization of research results, the creation of startups, technology transfer, and the practical implementation of scientific knowledge. The article develops practical recommendations for strengthening the scientific and innovation capacity of small businesses and private entrepreneurial entities in Uzbekistan. It concludes that closer integration of science, education, entrepreneurship, finance, and public support mechanisms is an important condition for the transition toward a knowledge-based economy and for improving the productivity and competitiveness of entrepreneurial entities.