Quantification of Risks on Technological Innovation using Fuzzy Analytic Hierarchy Process

Abstract

Innovation has become the key determinant of any organization in “Staying Relevant”, irrespective of the product or service produced. Innovation comprises different concepts based on the application through the product and service Life-Cycle. Technological Innovation has become the governing factor out of all which ensures the successfulness of the Innovation. But Innovation involves great amount of risks which even leads to an organization into a catastrophic situation in the absence of an appropriate Risk Management Strategy. In developing a Risk Management Strategy it is imperative to have a precise knowledge on the impact of Risks related to Technological Innovation, which can be represented by weightages. This paper presents Risks related to Technological Innovation based on the Literature and attempt to establish a relationship among the risks which forms a Hierarchical structure related to Fuzzy – Analytic Hierarchy process (F-AHP). Information unveiled in the literature and the ideas shared by Industry Expertise were the basis for pairwise comparisons. Consistency of the Pairwise comparison has endorsed using the Consistency Ratio. Consistent pair wise matrices were converted into Fuzzy matrices which have been carried out Fuzzy-AHP in obtaining the weightages related to Technological Innovation Risks. The weightages derived, provide a clearer insight on contribution of different risks on Technological Innovation failures and hence giving heads-up on the risks which need prior attention. Furthermore this illuminates the effectiveness of the Risk Management Strategy by providing facts to decide on which risks need to be Ignored, Mitigated, Addressed or Transferred. Thus, precise application of the findings of this research will absolutely help in developing a copy proof Risk Management Strategy which would ultimately offers many opportunities to a business that cannot be realized otherwise.