In innovation, Ideality plays a very important role in the development of any system. As a matter of fact, Ideality is the main driver of technological evolution. In a previous post, I mentioned that Ideality is measured by the following equation:
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Let us stop and think, however, as to what does this really mean? The beauty of the ideality equation is that it can actually be expressed as a Benefit/Cost ratio although this really depends on the available information and the analysis required by the audience that requires the calculations. The best scenario would be to express benefits in terms of potential revenue and harmful effects in terms of $ values. Putting this $ value on Benefits may not always be possible considering a lot of inventions are really radical. Some people consider it difficult to put values on Harmful Effects, but this task is actually easier to do than that for Benefits.
Based on my experience Harmful Effects are either Social ( involving Humans and Human settlements) or Ecological. On this premise, we can then proceed towards using standard valuation paradigms on Social and Ecological impact. We can go about doing this by estimating actual damage cost ( economic loss because of Social and Ecological damage), adaptation cost (cost of deploying measures to help affected areas to cope with damage), mitigation cost ( cost of deploying measures to prevent the damage). Deciding which cost to use is not that simple as detailed information needs to be assessed for each case. It is however prudent to use the highest among the 3 costs in assessing the ideality of the system. In the end, the numerator of the Ideality equation, is in fact, a triple bottom line expression of cost as that of Ecological Economics.
.png)
Let us stop and think, however, as to what does this really mean? The beauty of the ideality equation is that it can actually be expressed as a Benefit/Cost ratio although this really depends on the available information and the analysis required by the audience that requires the calculations. The best scenario would be to express benefits in terms of potential revenue and harmful effects in terms of $ values. Putting this $ value on Benefits may not always be possible considering a lot of inventions are really radical. Some people consider it difficult to put values on Harmful Effects, but this task is actually easier to do than that for Benefits.
Based on my experience Harmful Effects are either Social ( involving Humans and Human settlements) or Ecological. On this premise, we can then proceed towards using standard valuation paradigms on Social and Ecological impact. We can go about doing this by estimating actual damage cost ( economic loss because of Social and Ecological damage), adaptation cost (cost of deploying measures to help affected areas to cope with damage), mitigation cost ( cost of deploying measures to prevent the damage). Deciding which cost to use is not that simple as detailed information needs to be assessed for each case. It is however prudent to use the highest among the 3 costs in assessing the ideality of the system. In the end, the numerator of the Ideality equation, is in fact, a triple bottom line expression of cost as that of Ecological Economics.
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