The CIPRATECH origins

CIPRATECH grew out of the need to devote sufficient capital investment to the creation and development of Small and Medium Enterprises (SME) and New Technology Based Firms (NTBF), which are known to be the driving forces of economical and occupational growth in the E.U.

Within the European Union, public and private financial resources are available, however their utilization to bring a new technology or product from R&D to the production and commercialization stage suffers from capital risk evaluation difficulties. Methodologies exist and are currently used by capital risk companies for the assessment of both the viability and the risk associated with the commercial exploitation of opportunities in new technologies or products. Nevertheless, these methodologies are still very uncertain which makes it often very difficult to quantify the risk involved in the development, production and commercialization of new high-tech products .

This is due to the fact that the investing organizations are reluctant to take unquantified risks and usually prefer to direct available funds towards safer and more traditional portfolios (bonds and other low-risk fixed return investments). Changing this trend is of paramount importance in order to push traditional investments towards more productive use. Ideally, once a realistic quantification of the risk is achieved, it should be possible to attract venture capitals as well as pensions and mutual funds to invest part of their portfolio to finance SMEs, NTBFs and innovative products. This can only be achieved with the improvement and refinement of present methodologies and procedures used for capital investment risk evaluation.

An area where Probabilistic Risk Assessment (PRA) has been developed, validated and intensively used, is the nuclear energy industry. Its successful application in this industry has motivated the transfer of PRA methodology to other industrial sectors and now, with the CIPRATECH project, to the financial and capital investment sector.