A systematic review of risk management in innovation-oriented firms

Innovation and risk are inseparable. In fact, literature on innovation management often recommends that innovation-oriented firms must actively monitor, evaluate, analyze and treat future events in order to mitigate risks whenever possible. This approach is particularly important in emergent economies characterized by unstructured national innovation systems and constant economic and market instability. However, there has been no systematic effort to identify and categorize risks that potentially impact businesses based on innovation. Thus, we propose an interpretative framework of risk events with potential financial impact in innovation-oriented firms constructed and tested by means of a mixed studies review. The risk events were identified through a comprehensive systematic search and review of the published literature on risk and innovation. From the 115 works that were analyzed, it was possible to identify nine categories of risk events frequently associated with innovation-oriented businesses that may generate financial impacts. The proposed interpretative framework was tested in an empirical study with 13 innovation-oriented firms located in six Brazilian technological parks. Results from the empirical study suggest that managers found the proposed interpretative framework complete and comprehensive. Moreover, the empirical study signaled which risk events are more relevant for the Brazilian context. The proposed framework is a first necessary step for future development of ERM models applicable in innovation-intensive contexts.