Real Options Analysis on Ecosystem for Agri-biotechnology Start-ups in Indonesia

Indonesia as the country that has great biological resource is considering the development of Biopark, a kind of Science Park that focuses on biotechnology. The government of Indonesia already made Biopark development plan in 2009, but to date it has not been realized. The possible problem is that the project seems to have a negative net present value (NPV). It needs appropriate way to assess the value of investment in Biopark, considering more than one source of uncertainty and potential growth in the future. The way to commercialize the result of research and development by Biopark, which is done by start-up or established company, is also considered. Real option analysis, especially growth option, can be a useful framework to value the investment in Biopark. Valuation of investment in Biopark by real option analysis is expected to encourage the stakeholders to start the project as soon as possible. This research has a role in valuing potential unique project, Biopark, especially in condition of Indonesia.