Evaluating technological innovations: A method based on comparable transactions

The aim of this paper is to propose a method for the economic valuation of innovation. The proposed method is based on comparable transactions. It takes into account the intangible factors which characterize innovative processes. The research discussed in this paper is based on the idea of Open innovation Markets. In these markets, online intermediaries facilitate the exchanges bringing together buyers and sellers of innovation. An unintentional result is that much information about the transactions is generated. The idea of this paper is to use the data from past comparable transactions to evaluate the price of an innovation. To give a practical example of how the method can be used, data from the online intermediary Innocentive are used. The proposed method generates a price that can be compared with the results of other, traditional methods in order to improve the overall validity of the valuation.