Network flow interpretation of innovation processes and risks

The innovation processes are connected with uncertainty and considerable financial risk. No matter whether a new product, technology or methodology is promoted, there are several stages that the innovation passes. The first three are connected with venture investments and the final - with eventual good profits. It is possible that the outcome is a failure, which is normal for any venture enterprise. Convenient tools for modeling the introduction of an innovation are the network flow models which turn to be fairly adequate and to provide reliable data to the decision maker. It is to be noted that the process is unidirectional, i.e., it cannot go to back stages, the underlying graph is a directed acyclic one and this structure is of increasing interest in the research area. The work is illustrated by a numerical example which demonstrates the relevancy of the network flow model.