A practical approach was developed to calculate how design flexibility–that is, real options–in systems can increase the value of these enterprises. A flexible approach to the deployment of infrastructure systems enables owners to manage the development of these facilities to increase expected value. Real options in the system make the system adaptable to future patterns of technological innovation and changes in stakeholder needs. With this flexibility, system managers can respond effectively to good opportunities and withdraw from unproductive paths of deployment. This is important because forecasts concerning major infrastructure systems are inherently uncertain: trend-breakers routinely disrupt historical patterns. Real options are especially valuable for innovative, major long-term developments, for which trends hardly exist and forecasts are highly speculative. To illustrate the use and value of real options, a case study was followed for the deployment of a particular aspect of intelligent transportation systems: innovative crash avoidance systems that reduce accidents at highway intersections.
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