A DEA-based framework for innovation risk management in production systems: case study of innovative activities in industries

Abstract

This paper provides a framework for evaluation of innovation risk based on Data Envelopment Analysis (DEA) method. In this framework, the common paradigms of innovation risk are considered as inputs and the various types of innovation are as outputs. These risk paradigms were extracted from valid resources of innovation sector, and a comprehensive classification of innovation types, provided by OECD, was used as outputs category. The relationship between these inputs and outputs is assessed by DEA method based on the CCR model. In this survey, the framework was implemented for innovative activities in various industries, and the results lead us to draw the “Innovation Path” that shows the development direction for each understudy cases. The Innovation Path that is derived from the numerical results shows the numerical goal and useful information about innovation management systems. This path can be used by industrial managers, decision makers and strategists to take the best decision and design the practical strategies to manage the innovation risks.