THE EFFECT OF TECHNOLOGICAL RISK, MARKET UNCERTAINTY AND THE LEVEL OF COMPLEXITY ON NEW TECHNOLOGY VENTURES’ SUCCESS

Abstract

Innovations in products and services have become a necessity for the survival of modern organizations. The impact of Complexity, Technological risk and Market risk and uncertainty on the success of new technological ventures is investigated. The Complexity dimension reflects the way new ventures are managed during the development and marketing phases. The Novelty dimension reflects market uncertainty, mainly affects the way information about the customers' needs is collected and incorporated into the product design. The technology dimension, deals with the way the development process should be managed. Higher levels of technological risk require longer development periods, more design cycles and later design freeze. Projects are classified by their level of Novelty, Complexity and Technological risk. Structural equation modeling is used in this study to explore the relationships between the various components describing the innovation nature and assessing its success. The study's approach enables testing the relationships between the dependent variables (the Success Measures) and the innovation characteristics. It is shown that building technological infrastructure and new knowledge or technology has a greater impact on the venture's success than meeting operational and economic goals. The question this paper is trying to answer is what factors are more important and how organizations should structure their market and technological strategy. We found that there is no contradiction between high levels of risk or uncertainty and business success. The success of system ventures is significantly higher than the success of lower levels of complexity. Older and more experienced entrepreneurs are likely to be engaged in more complex and novel initiatives than younger, less experienced ones. This study highlights the importance of technological risk with respect to market uncertainty. It is shown that to overcome technological obstacles and to enrich the developing organization with better knowhow and technology will lead to higher innovation success. Although risk and uncertainty that are associated with technology and market may have a negative impact on innovations' success, they are also a source for new opportunities. The research investigates the impact of Technological risk and Market uncertainty on Innovations' success. This approach enables to identify the most important factors affecting technological innovations success.