Focus 2

Flexibility of RI, an analysis using real option reasoning

Like many large scale investments RI are examples of complex products and systems characterised by capital, technology and knowledge intensive investments and networks involving numerous actors in their development and operation processes. As such they are long term projects and face many uncertainties throughout their duration. Since RIs are intended to support research and innovation activities their flexibility to new research and innovation needs is a critical aspect of their efficiency and effectiveness.

We propose to adopt a real option reasoning framework to explore and provide insights on some of the critical aspects of RI related to the flexibility criterion. RIs have in fact many option-like characteristics which make their adaptability and responsiveness an important determinant of their overall performance.

In this perspective our research will build upon a growing literature on real option reasoning to:

• Identify different mechanisms (technical, organizational, institutional) embedded within RIs that support their flexibility to emerging innovation needs.
• Better understand how the flexibility embedded within the RI supports different types of effects analyzed by the BETA methodology.

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