The Value of Innovation in Nanotechnology

Abstract

This paper addresses the highly current topic of using quantitative economic methods to support rational investment decision-making in the domain of technological innovation. Such investments are characterized by a high degree of exogenous and endogenous uncertainty combined with complex feedbacks, making conventional capital budgeting techniques inadequate. It introduces a comprehensive valuation model developed for the Shyman (Sustainable Hydrothermal Manufacturing of Nanomaterials) project, which researched and implemented new technologies in nanomaterial production and application. This represents a highly innovative and complex industry in all life cycle stages, making it a perfect candidate for research. The model combines various analytical methods, including a recursive form of life cycle costing (LCC), as well as statistical simulation (Monte Carlo) and real options, and addresses valuation from the perspective of a new end-product, as well as that of the production facility investor. A high Net Advantage to Innovating (NAI) has been identified in the industry. This result is strongly biased in favour of end-product innovators. Nevertheless, the hydrothermal synthesis-based nanomaterial production process benefits from its high degree of flexibility, i.e. option to switch, with a significant value premium arising due to outsize dynamics and uncertainty in the nanoindustry. Experience gained through this research can be extended to other cases of value-based analysis related to innovation.

Evaluation of Influence of Innovation on Enterprise Productivity

“…A comprehensive assessment model was developed and presented by Shyman (Sustainable Hydrothermal Manufacturing of Nanomaterials), who studied and introduced new technologies in the production and application of nanomaterials. The experience gained in this research is easily applicable to other cases of cost analysis related to innovation (Vlachy, 2017).…”

“…The study of influence and interrelation of innovation and enterprise productivity over the Innovation activities of enterprises, % past few years has been one of the most important problems covered in foreign scientists' research. Despite the fact that many empirical studies have been carried out in connection with this problem, scholars have not paid enough attention to measuring the impact of innovation on productivity in small and medium-sized enterprises (Hadhri, Arvanitis & M'Henni, 2016;Hall, Lotti & Mairesse, 2009;Vlachy, 2017). Based on the data concerning small and medium-sized enterprises in Italy, for the first time, a study on the problems of the interrelation between innovation and enterprise productivity was conducted which measured their interrelationship (Mairesse et al, 2005).…”

The importance of innovations and their impact on labor productivity in small and medium enterprises of Kazakhstan - in the framework of the industrialization

“…A comprehensive assessment model was developed and presented by Shyman (Sustainable Hydrothermal Manufacturing of Nanomaterials), which studied and introduced new technologies in the production and application of nanomaterials. The experience gained in this research is easily applicable to other cases of cost analysis related to innovation [8].…”

Ferramentas E Técnicas Para a Avaliação De Projetos De Inovação Radical Ou De Grandes Incertezas: Uma Revisão Integrativa De Literatura

“…A indústria de nanomateriais é caracterizada por processos inovadores em todas as fases do ciclo do produto e a análise financeira convencional torna qualquer projeção incerta e com alto grau de risco. O modelo que combina vários métodos analíticos, incluindo uma forma recursiva de Custeio do Ciclo de Vida (LCC), bem como simulação de Monte Carlo e RO, apresentam vantagem para inovar [15].…”