The shorter life cycle of technologies and the fast
introduction of new technologies into IPS2 require a new
approach to the evaluation of IPS2 to support
stakeholders in the investment decision.
In the traditional approach, Cost-Benefit Analysis (CBA)
focuses on financial and economic aspects for analyzing
prospective IPS2 ideas within an industrial innovation
process. It accounts for all (negative and positive) effects
of policy measures, allows comparison of the costs with
the benefits of the proposal over time and can also be
used to rank alternatives in order of their net social gains
or losses. But this approach has some disadvantages:
• It cannot include impacts for which there exist no
quantitative or monetary data.
• It presents difficulties in establishing the social
discount rate.
• Usually it is more expensive and time-consuming than
other, less broad, methods.
• It may lead to distributional issues being overlooked.
The SCBA approach presents new principles of CBA
including the assessment of mixed (qualitative and
quantitative) evaluation. This new approach responds to
the need to evaluate pacing enabling technologies for
potential next generation IPS2. This evaluation is based
on market knowledge capture, introducing the competitive
sustainable perspective and focusing the new ‘science to
market’ relationship.
Market knowledge capturing for IPS2 regards coexistence
or substitution of key with pacing technologies, to respond
to competitive needs or to develop new markets looking
forward to sustainability issues.
This approach evaluates the early impact of other aspects
beyond the traditional economic and financial ones. It
enables a costs and value benefits analysis for future
market scenarios by integrating all production and
consumption aspects. The concept of value benefits in
the K-economy reinforces the view on present
competition and enables future looking industrial
innovation strategy. Recently, the importance of other
factors, such as socio-political and environmental issues,
has been also introduced at EU level, as mutually
reinforcing the economic and financial decisions for
market development studies.
Using appropriate decision-making techniques, this
approach allows to build medium-long term assessment
of pacing enabling technologies and expected next
generation of IPS2:
• assessing impacts for which quantitative or monetary
data do not exist;
• looking at a more relaxed approach towards benefits
measurement;
• comparing alternatives between IPS that have more or
less the same outcome and great value in use;
• exploring value benefits of important alternatives with
the sensitivity analysis to assess the worth of decision
implementation.