A Valuation Method for Defense Technology: Procedures, Detailed Modules and Application

Abstract

Technology valuation is an essential element in increasing efficiency in national R&D investment in terms of invigorating technology commercialization and transfer. Even if vigorous research activities had been conducted for developing a valid method of technology valuation in each technology category to date, there have been at most rare trials to develop an appropriate valuation method for public technology possessing intrinsic public benefit. Defense technology, a representative sector of public technology, provides unique value for the public by enhancing security and defense. This public benefit is as important as its economic value when estimating total technology value. Thus, developing a new method of valuating individual defense technology is required to prevent its underestimation. The main objective of this research is to develop an overall framework and detailed procedures to valuate defense technology in monetary terms through an exemplary case. We propose a DCF based method to calculate economic value for defense technology and a cumulative weighting approach to take the public benefit of defense technology into account when determining total valuation.