The Handbook of Technology and Innovation Management

7.5. Future Directions

We conclude by highlighting four opportunities for future research: the continuing lack of practical application and adoption of most research, and more substantive questions such as managing a portfolio of projects with extremely skewed potential outcomes, understanding the interdependence between portfolio projects, and managing external options, particularly across a complex and interdependent network. The first area has been previously and repeatedly identified. Indeed, the field of R&D project selection has always been characterized by a conspicuous and persistent gap between theory and practice. As academics have developed ever more sophisticated quantitative models, practitioners have preferred simpler economic analyses, qualitative scoring techniques, and strategic approaches. Academia and industry do interact to some degree: there are examples of quantitative models being applied in practice, and practical scoring techniques do appear in the academic literature. Nevertheless, the gap has remained surprisingly broad. It appears as a recurring theme in literature surveys spanning several decades (Baker and Pound, 1964; Souder, 1972; Steele, 1988).

This lack of progress is surprising because the strategic role of R&D project selection is widely recognized. Almost every paper on the subject begins by describing the critical importance of wise R&D investments to the long-term prospects of the firm. Yet academic models almost invariably treat project ...