Conclusions

This work was motivated by the role of real options as a risk management and an uncertainty-filtering methodology that helps minimize downside risk and maximize upside potential of a firm’s investments. Firms evolve in an uncertain and dynamic environment in which they use the “new knowledge [they] derived through the healthy balance between competition and cooperation involving employees and business partners” (strategic knowledge co-opetition, E. G. Carayannis 2009) in the definition of their real options. These real options serve as the basis for their decision making so as to reap the full benefits of the flexibility embedded in their investments. By the exercise of their options, firms have changed the parameters of their previously temporarily stable ecosystem, resulting in a now unstable environment. Having completed the co-opetition process, firms create “new knowledge through a series of interactions and changes at various levels of the organization, spurred by the co-generation and complementary nature of that knowledge,” what Carayannis (ibid) coined strategic knowledge coevolution. Through innovation, they also undergo strategic knowledge co-specialization, “learning and knowledge which encourages individuals or groups to expand their roles into new areas and new domains, in a complementary and mutually-reinforcing fashion” (ibid). Strategic knowledge co-specialization enables firms to develop sustainable entrepreneurship (E. G. Carayannis 2008), that is, “the creation of viable, profitable and scalable firms that engender the formation of self-replicating and mutually enhancing innovation networks and knowledge clusters leading towards what we call robust competitiveness.” As such, firms are enabled to develop a temporarily “unfair” competitive advantage as they develop knowledge in new areas and exploit them. In this context, firms now evolve in a temporarily stable environment, sustainable entrepreneurship (ibid), a “state of economic being and becoming that avails systematic and defensible ‘unfair advantages’ to the entities that are part of the economy and is built on mutually complementary and reinforcing low-, medium and high technology, public and private sector entities (government agencies, private firms, universities, and non-governmental organizations).”