Abstract
This paper examines the problems associated with the application of traditional capital budgeting practices to the valuation of radically new processes and technologies in an environment of rapid technological change. It focuses on a restructured utility industry, and the possible emergence of the Virtual Utility.
Different types of technological innovation are discussed. The paper then illustrates how capital budgeting, by virtue of its accounting orientation, often fails to identify important benefit categories associated with emerging technologies. Finally, the paper offers suggestions for enhancing the capital budgeting process by making qualitative assessments to better understand the benefit implications of architectural innovations such as the Virtual Utility.
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Awerbuch, S., Carayannis, E.G., Preston, A. (1997). The Virtual Utility: Some Introductory Thoughts on Accounting, Learning and the Valuation of Radical Innovation. In: Awerbuch, S., Preston, A. (eds) The Virtual Utility. Topics in Regulatory Economics and Policy Series, vol 26. Springer, Boston, MA. https://doi.org/10.1007/978-1-4615-6167-5_5
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DOI: https://doi.org/10.1007/978-1-4615-6167-5_5
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