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Evaluation of Open Innovation with R&D Alliances for Breakthrough Technologies in the Energy Sector

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  • Stephan Hess
  • Roland Y. Siegwart

Abstract

In the energy industry, a time of dynamic innovation and uncertainties drives R&D incumbents to extend their technology screening process to the early technology lifecycle. Many early breakthrough technology innovations stem from academia and are developed by academic spin-offs. In these situations an incumbent¡¯s future technology organization (FTO), focused on open innovation, needs to expand its evaluation and development capabilities towards R&D alliances with academic technology spin-offs.In the light of the open innovation and real option frameworks this study analyzes R&D projects using the real options analysis (ROA) and discusses the critical decision of whether to develop technology internally or externally. It explores R&D alliances between academic spin-offs and a large power industry player and investigates the concept and role of a FTO in the open innovation process. A model will be introduced to operationalize the FTO concept and practically evaluate the risk of open innovation with R&D alliances for breakthrough technologies. Contrary to the common view that risks increase when open innovation is applied along with external development of a breakthrough technology in R&D alliances, the present study shows that the risks and uncertainties can be mitigated and controlled when applying ROA and the FTO model.

Suggested Citation

  • Stephan Hess & Roland Y. Siegwart, 2014. "Evaluation of Open Innovation with R&D Alliances for Breakthrough Technologies in the Energy Sector," Business and Management Research, Business and Management Research, Sciedu Press, vol. 3(2), pages 123-137, June.
    • Handle: RePEc:jfr:bmr111:v:3:y:2014:i:2:p:123-137
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    References listed on IDEAS

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    Cited by:

    1. Greco, Marco & Locatelli, Giorgio & Lisi, Stefano, 2017. "Open innovation in the power & energy sector: Bringing together government policies, companies’ interests, and academic essence," Energy Policy, Elsevier, vol. 104(C), pages 316-324.

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    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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