article explores key aspects of the transformation of the Uzbek economy with a focus on innovation and innovation activity. The author analyses the current state of the Uzbek economy and identifies the problems that hinder its development. The main focus is on the role of innovation in achieving sustainable economic growth, diversifying industry and increasing the country's competitiveness in the global market. The place of innovations in overcoming economic crises and the need for a paradigm shift in innovation development are highlighted. The article considers the OECD recommendations on innovation and types of innovation described in the Frascati Manual and Oslo Manual. As a result of the study, the author has proved that innovation is crucial for social progress, sustainable development and important for shaping the development policy of Uzbekistan's economy in the context of global challenges and rapidly changing world economic paradigm.