ABSTRACT
The word “innovation” in a general sense implies a positive probability of “betterment” (AIMA 1996, Peters 1999, Porus 2009). Therefore, the œnancial implications of innovations are to be viewed and reviewed both strategically and operationally. The “strategic view” refers to the long-term sustainability of the œnancial (or commercial) viability of an innovation. The “operational view” is about the convenience in the use (and conduct) of innovation and its relevant
29.1 Preamble ............................................................................................................................... 495 29.2 Innovation Process and the Financial Implications .............................................................. 496 29.3 Financing of Innovation Based on the “Product Life Cycle” Concept ................................. 498 29.4 Strategic Financial Implications of Innovations ................................................................... 498 29.5 Long-Term Return on Investment for the Financiers of Innovations ................................... 499 29.6 Financing Models of Innovations ......................................................................................... 501
29.6.1 Equity Model ........................................................................................................... 501 29.6.2 Takeaway Finance Model ........................................................................................ 501 29.6.3 Consortium Model ................................................................................................... 501 29.6.4 Structured Finance Model .......................................................................................502 29.6.5 Public Finance Model ..............................................................................................502 29.6.6 Reuse Finance Model .............................................................................................. 503 29.6.7 Entrepreneurial Finance Model ............................................................................... 503 29.6.8 Pay-per-Use Model .................................................................................................. 503 29.6.9 Special Purpose Vehicle Model ............................................................................... 503 29.6.10 Innovation Fund Model ...........................................................................................504 29.6.11 Cooperative Fund Model .........................................................................................504 29.6.12 Convertible Bond Model .........................................................................................504 29.6.13 Seed Financing Model .............................................................................................505
29.7 Monitoring Mechanism of the Financing of Innovations .....................................................505 29.8 Accounting Treatment of the Cost of Innovations ................................................................506
