Abstract

The object of this research is to identify the sources of risk in innovation projects and to determine whether they
could be managed better. Due to the diversity of opinions and theories over the nature of risk, reaching an
agreement about risk management is difficult. This will be a major problem if any effort is made to proactively
manage ‘risk’ in naturally ‘risky’ areas such as innovation. Some risk management could be valuable, but
perhaps too much, or inappropriate risk management might stifle innovation. It is necessary and valuable to
consider the process of innovation from conceptualization to commercialization, how uncertainties are formed,
how they are managed in that context, and how the techniques of risk management can be further deployed to
enhance the success rate of innovation projects. Various approaches have been proposed to risk management in
general, however the extent to which they are relevant for managing innovation is uncertain. Thus, during this
paper, the general model of innovation and the process of risk management for managing the parameters which
create the risk in these projects are explained.

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