Why Value Technology?

R&D is a massive investment. When a company decides to fund a new wing design, a smarter engine, or a digital toolchain — it’s placing a bet. And like any investment, we want to know: What’s the return?

That’s where TeVA comes in. It allows us to rank different technology options based on their financial value, not just technical feasibility or performance improvements. A more efficient solar panel, for example, may be technically impressive, but if solar efficiency isn’t the bottleneck in your system, its value could be close to zero.

TeVA ensures technologies are evaluated not in isolation, but in terms of how they improve the system as a whole — and ultimately, the business case.

Core Principles of Technology Valuation (TeVA)

TeVA was formalised in Prof. Olivier de Weck’s book “Technology Roadmapping and Development” ¹ and introduced to Airbus during his tenure as CTO. It has since become an integral part of how major engineering firms assess and prioritise R&D opportunities.

At its core, TeVA connects technical merit with financial impact. It requires translating system-level performance improvements into monetary outcomes. This helps organisations determine which technologies truly shift the needle — and which ones may not justify the cost of development.

Delta Net Present Value (ΔNPV) Analysis

The foundation of TeVA is Net Present Value (NPV) — a standard financial tool that calculates the present-day worth of future cash flows. Revenue, cost, investment — all of it is discounted back to today using a rate that reflects risk and opportunity.

TeVA starts by translating engineering outcomes into financial impacts. System-level metrics such as fuel burn, mass, or seat capacity are linked directly to cash flows. For example, a more aerodynamic wing that saves 497 kg of fuel per flight contributes an extra $2.42M in value for the airline. Increasing capacity from 100 to 110 passengers translates into a $7.89M gain, largely driven by added ticket revenue.

But the clever bit isn’t just calculating NPV — it’s calculating ΔNPV. This begins with a baseline: the NPV of the system without the new technology. Then, the NPV is recalculated with the technology in place. The difference between the two is the ΔNPV — the value added (or eroded) by introducing that specific innovation.

Delta NPV analysis is a focused way to isolate the true impact of a technology. Rather than asking is this idea valuable in general?, it asks how much value does it add compared to what we already have?

Value for Who?

It’s easy to default to viewing value through our own lens — as a company, a project lead, or an engineer. But TeVA encourages a broader perspective. It asks: who benefits, and by how much?

At a minimum, there are two stakeholders to consider:

• The customer, who experiences value through better performance, lower costs, or enhanced capabilities.
• The firm or manufacturer, who gains value through margin improvements, competitive advantage, or reduced production costs.

A single technology might benefit both — or only one. And here’s the catch: if a technology improves margins for the manufacturer but does little (or even worse, adds cost) for the customer, it’s unlikely to succeed commercially. No matter how beneficial it looks internally, it still needs to meet a market need and deliver visible value to those who use it.

That’s why TeVA doesn’t stop at internal business cases. It explicitly maps ΔNPV for the manufacturer on one axis and ΔNPV for the customer on the other. Technologies that land in the top-right quadrant — valuable to both — are the most compelling. They create shared value and are often the easiest to align around across functions, partners, and markets.

TeVA in the Real World

If all this still feels a bit abstract, let’s ground it in a concrete example. Then we’ll take it a step further — and see how TeVA can be scaled to guide R&D portfolio decisions across an entire organisation.

A Commuter Aircraft Example

Consider a commuter airline operating a 100-seat aircraft over a 15-year period. The baseline model includes ticket revenue, fuel cost, maintenance, crew salaries, and capital expenditures. Under realistic assumptions, the aircraft yields a positive NPV for the airline, and likewise for the manufacturer.

Now introduce eight possible innovations — ranging from a new composite wing to digital design acceleration tools. Each one is evaluated for its impact on both stakeholders.

• Some, like increasing passenger capacity (2PAX), significantly boost value for the airline — delivering a ΔNPV of +$7.89M. This comes from increasing the seating capacity from 100 to 110 passengers, which raises revenue per flight while most other operating costs stay flat. For the manufacturer, the value added is +$334.8K per aircraft, driven by a modest 5% increase in aircraft price. The required R&D investment is $500M, making this one of the most efficient improvements.

• Others, like single pilot operations (5AUT), offer strong gains to the manufacturer — +$2.14M per aircraft — by allowing a 25% increase in aircraft price to recover the $1.5B automation and certification cost. However, for the airline, the crew cost savings (from reducing cockpit crew to one pilot and a trained cabin manager) aren’t enough to offset the more expensive aircraft. The result is a −$2.7M ΔNPV to the airline over the 15-year period.

• A few, such as new engines (3SFC) or structural optimisation (4STR), produce mixed results. The new engines improve specific fuel consumption by 10%, which reduces fuel costs and adds +$704K in value for the airline. However, the high R&D cost ($3B) and 15% increase in aircraft price lead to a −$399K loss per aircraft for the manufacturer. In contrast, structural optimisation reduces aircraft empty mass by 10%, improving fuel efficiency and generating +$5.7M in airline value. But it adds 10% to fuselage unit cost and results in a −$339K ΔNPV for the manufacturer.

The result is a multi-dimensional view of value — one that captures not just technical benefit, but business impact from both sides of the table.

Constructing a Value-Aligned R&D Portfolio

Armed with ΔNPV insights for both the airline and the manufacturer, the next step is to move from individual technologies to a portfolio-level decision. Each innovation is assessed not only by its standalone value, but also by how well it complements others and fits within overall R&D constraints.

In this example, the manufacturer has a fixed R&D budget of $3B over five years. Based on combined stakeholder value and investment efficiency, three technologies are selected: the high-aspect-ratio composite wing (1WNG), increased seating capacity (2PAX), and improved manufacturing methods (8MFG). These are integrated into an upgraded aircraft variant — “A+” — offering both near-term customer value and longer-term competitive advantage.

Other technologies are deferred for future products, such as a next-generation aircraft “B,” where synergies and reuse (e.g. from the wing and manufacturing improvements) further improve the business case.

The portfolio isn’t chosen at random — it’s the result of structured analysis, stakeholder alignment, and strategic foresight. And with a visual map of ΔNPV across technologies, it’s immediately clear which options deliver the most value for both sides of the equation.

Final Thoughts

TeVA offers a pragmatic lens for innovation. It reframes R&D not as a pursuit of novelty for its own sake, but as a process of value creation — one that can be modelled, quantified, and aligned across the organisation.

In industries where complexity is high and resources are finite, this clarity is essential. It enables engineers and business leaders to focus their efforts where they’ll matter most, and to make informed trade-offs when resources are tight.

At OptimiSE, we help organisations embed decision-making methods like TeVA into their innovation process — feel free to reach out if this resonates.

How is technology valued in your organisation? Are financial impacts part of your early-stage decisions — or something you only check at the end?

¹ Technology Roadmapping and Development — A Quantitative Approach to the Management of Technology, Olivier L. de Weck, Springer, 2022.