A New Method for Modeling Innovation and R&D in Business Simulations: Illustrated With a Simulation of a New Product Development Portfolio

Abstract

Though appropriate for total enterprise simulations, the common method of modeling innovation and R&D in business simulations is not suitable for teaching the management of innovation and R&D. The common method is deficient because it simulates the outcome, but not the process, of R&D. This discussion paper presents a method that was proposed at ABSEL 1999: modeling innovation and R&D as a search of a technology space. This paper also presents the first simulation to use the new method. The simulation teaches R&D managers to manage a portfolio of new product development projects.