Technological innovation has been widely recognized as a very important factor in strengthening firms’ competitiveness. Continuous launching of newly technology-based product by firms is aimed at keeping the firms staying competitive in the market. Large firms have capacity to evaluate and access technology they need from various sources besides developed them internally. These firms have the capacity to take risk through experimentation of even untested technology yet have good commercial potential. On the other hand, most SMEs do not have such this capacity due to high risk of such this undertaking.
To address this challenge, a new strategy needs to be considered, that is, through hedging normally practiced the financial and commodity markets. Through this strategy a firm will only need to invest a very small fraction of the total value of a contract to secure its right to execute the contract if the contract will deliver benefit. Hence, the potential loss that may occur for the firm that hedges the contract is minimized.
Firms can also adopt this hedging type strategy to access technology from various R&D institutes. Such this strategy has been successfully implemented in Taiwan. This paper will elaborate why and how hedging strategy can help firms to improve its capacity to access and adopt technology and help R&D institutes to accelerate its technology transfer to firms. Hedging strategy seems to be a new concept and practice that can also be adapted in the field of management of innovation technology.
|Publisher||:||Jurnal Forum Ilmu Pengetahuan dan Teknologi Inovasi (IPTEKIN) IV|
|Keywords||:||Hedging R&D, technology development, commercialization of technology, tech-based start-up, innovation financing|
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