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The Value of Innovation-5

Elsevier B.V.
DOI: 10.1016/b978-044451683-1/50008-5


Publisher Summary The innovation process creates new business options that may or may not be used in the future. These options have a value; however, their value is usually not quantified and does not appear in the company accounts. The art of assessing the potential value of outside the-box innovation and monitoring the value of the innovation project through the development stages is one of the weaker parts in innovation management. In order to assess the value of innovation, one needs to understand the value creation process and identify the factors that determine the value. The value of innovation is determined in three different domains: the customer domain, the strategy domain, and the innovation domain. These domains represent three different mechanisms that determine or limit the value of an innovation project: the customer's willingness to pay, the company's strategy on how to extract value from the market, and the innovative idea on how to create new value. The value of innovation needs to be assessed independently from these three different perspectives. In the innovation domain, the potential value of the innovation project is estimated, whereas in the strategy and customer domains, only the limits to the value of the innovation can be assessed.

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