... has to be adopted and when. Time, in particular, is a crucial point, and deciding on the appropriate time is a critical issue which raises substantial questions coming from: the intrinsic uncertainty surrounding each new technology; the inherently intangible nature of many of the expected benefits; the long-term perspective involved by a technological commitment; the current and future availability of technical and economic information about the new technology; the need to develop new competences and skills; the role played by learning processes; the partial or complete irreversibility of the innovative investment. Since traditional capital budgeting techniques tend to ignore all these questions, they do not seem to be of particular help in deciding on the adoption time. Recently, however, a valuation approach which tries to overcome these limitations has emerged from the theory of financial option pricing. The resulting real option approach seems to provide a powerful tool for the assessment ...

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