The Value of Innovation in Nanotechnology

  • Jan Vlachý Czech Technical University in Prague Masaryk Institute of Advanced Studies
Keywords: Innovation management, new technologies, net advantage to innovating, life cycle costing, statistical simulation, real options


This paper introduces and discusses 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. Combining various analytical methods, including a recursive form of life cycle costing (LCC), as well as statistical simulation (Monte Carlo) and real options, 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. More generally, this research contributes to the highly current topic of quantitative value-based analysis in innovative industries and develops a viable methodology that can facilitate capital budgeting decisions related to innovations.


Author Biography

Jan Vlachý, Czech Technical University in Prague Masaryk Institute of Advanced Studies

Associate Professor
Academic Director for International Cooperation