Anti-crisis Cluster Innovation Strategy Risk Management with Usage of Real Put Option

Abstract

The subject of investigation includes the issue of adjusting an innovation strategy of an industrial innovation cluster under uncertain behavior of the external and internal environment. With that in mind, a possibility is regarded as to abandon the cluster strategy that has already been initiated and even, subject to the relevant threats of the regional economic environment, to abandon it and switch to another strategy. In this case, the strategy is set in the form of an optimal portfolio of major companies representing the respective economic sectors of a region, following which the cluster strategy is investigated for any possibility to abandon its implementation at any time within the planning horizon, other than the last year. In order to manage the risks of the industrial innovation cluster evolution, this article employed a real put option technology to abandon the strategy. As a function that most adequately characterizes the present state and prospects for the development of individual companies and industries, it is possible to use a level of market capitalization by value. And as a cash flow of industrial projects, it is possible to use an incremental cash flow representing a difference between the market capitalization values from time to time. This cluster evolution risk management philosophy utilizing the real option techniques eventually allows to adjust the global regional strategy when required.