Portfolio management for the commercialization of advanced technologies

This paper describes the validation of one aspect of the value creation model (VCM) that Lucent's Advanced Technology (AT) group has developed and applied to research driven innovation projects. This aspect is the rate/productivity metric (RPM) that is used to quantify and understand the expected present value of financial return of each project. The RPM includes estimates of the future dollar returns along with the risk associated with these returns thereby enabling the calculation of an expected value of returns. Uniform use of this metric allows management to analyze the collection of projects uniformly as a portfolio system which aids in the decision making purposes.