R&D and Innovation Project Selection: Can Optimization Methods be Adequate?

This article proposes a comprehensive framework for R&D and innovation project selection under uncertainty and subject to real-world constraints applicable to the Brazilian electricity sector, using a combination of integer programming formulation and a PROMETHEE-based method. The objective is to contribute to this domain by offering an approach suitable for the challenges of this sector, but also applicable to other situations involving R&D and innovation investments under similar conditions. The manuscript presents applications using real data from an electricity company. It also compares the proposed method with similar approaches found in the literature such as PROMETHEE II and V. The application revealed the best performance of the proposed framework in dealing with the sector's regulatory constraints, which emphasize the companies’ accomplishment with R&D and innovation expenditures obligations. In this way, although R&D and innovation project selection is not a typical case of optimization, under some particular regional, sector-based or organization boundaries this can be a better solution.