An Analysis of Investment Opportunities in Emerging Markets Space Applications for Defense
- Paper number
IAC-06-E5.2.02
- Author
Dr. Mircea Boscoianu, Military Techical Academy of Bucharest, Romania
- Coauthor
Dr. Gabriela Prelipcean, Stefan cel Mare University of Suceava, Romania
- Coauthor
Dr. Adrian Coman, Military Techical Academy of Bucharest, Romania
- Year
2006
- Abstract
This paper present a Value at Risk (VaR) analysis - based Real Options Valuation (ROV) methodology designed for optimising flexibility in complex space application for defense. Military related space missions represented nowadays in important portion of space activities and will affect future technologies development and investment opportunities in dual use applications. In emerging markets directions for investment in technology are: miniaturization and development of smaller and smarter sensors with a dramatic cost reduction, increased on-board data-processing capabilities, development of new in-orbit maneuvering capabilities and new defensive technologies. In emerging markets the main application categories for military related space missions are: space transportation, sattelite operations, command-controll-communications (C3), intelligence surveillance-reconnaissance (ISR), environmental monitoring and space control. The key factor for the development of military related space technology is the financial support; the overall funding stream is based on government involvement but there are also investment opportunities which may include industrial and private equity investors. Depending on the importance of strategic needs, the overall funding stream can be clasified in three following categories: exclusively governmental funds, goverment start-up with later investment by industry or private investor, industry start-up and governmental leverage to meet the critical mass development needs. The Value-at-Risk for ROV Approach was first formulated by Neufville, Scholtes (2005) in an framework which propagate systems thinking and flexibility in engineering design. This approach will be exemplified through an application to a case study involving investment opportunities in emerging markets. The case study is new and original in this kind of applications and will indicate the methodology to calculate the value of flexibility as regards increases in expected Net Present Value (NPV) and changes in minimum risk and losses.
- Abstract document
- Manuscript document
IAC-06-E5.2.02.pdf (🔒 authorized access only).
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