The Valuation of Technology: Business and Financial Issues in RandD

The Valuation of Technology: Business and Financial Issues in RandD

The Valuation of Technology: Business and Financial Issues in RandD

The Valuation of Technology: Business and Financial Issues in RandD


"The Valuation of Technology is a timely and thoughtful book on a critical issue in the global business arena. Peter Boer's insights constitute important reading for leaders in all fields."-Jeffrey E. Garten, Dean, Yale School of Management

"The Valuation of Technology fills a critical void for those executives who wish to upgrade technology decision making from an art to a more definable science."-George B. Rathmann, Chairman and CEO, ICOS Corporation

Technology valuation has replaced risk management as the management approach to analyzing the profitability of current and future technology projects. The Valuation of Technology: Business and Financial Issues in R&D explores the link between research and development and shareholder value in a comprehensive way, providing mathematical models for the valuation of R&D projects and answering critical questions on how to analyze technology initiatives and forecast their future value. This professional reference creates a common language for understanding the financial issues relating to R&D and provides analytical tools that businesspeople, scientists, and engineers can use to assess new technologies, R&D projects, and R&D budgets-thereby facilitating communication and producing more enlightened decisions. It also identifies several common fallacies in performing valuation of technology-based properties, including adding together enterprises with different time horizons and failing to recognize the value of risk-minimization strategies.

Among the many remarkable features of The Valuation of Technology:
• Offers quick, easy models for technology valuation that readers can use immediately
• Includes a method for the quantitative valuation of technology projects and shows readers how to build a project spreadsheet and assign value to research projects
• Comes with a disk containing templates for a selection of mathematical models provided in the book


The linkage between scientific discovery and the delivery of practical results—what we call technology—is vital to the well-being of individuals and to the wealth of businesses and nations. Technology is said to account for half of the economic growth of developed countries. Yet the link between scientific discovery and the development of new technology is poorly understood.

Why this lack of understanding exists is no mystery: the transformation of science into technology is mediated by business forces and brings together two sets of people whose outlooks, specialized knowledge, and professional languages are very different and often out of touch with each other. Many of those charged with making decisions regarding science and technology—business executives and a host of government and university officials—have little or no understanding of scientific process or the culture in which it operates. On the other hand, many who do understand technological development are poorly informed about financial and business matters. a chasm of knowledge and interest divides these two important communities and hinders the progress that each seeks. This should not be surprising. the people who enter the communities of business and science are products of different educational processes, operate with different tools and languages, and are generally motivated by different factors. As a result, communication between them is often superficial or limited to a narrow set of issues on which their interests converge. in too many cases, there is a lack of mutual respect. the destinies of these two groups are inextricably linked, however, and they have no choice but to bridge the gap and deal with each other.

The valuation of technology is that bridge, and recognition of its central position accounts for the increasing interest in this once obscure subject. the process of valuation provides an opportunity for . . .

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