Abstract: The growing competition in today's world has forced companies to use creativity and innovation in their processes and products. In the meantime, the knowledge-based companies need to pay more attention to the challenges of the new products development process due to their knowledge-based nature, confronting the competitive dynamics of the market and changes in the needs and demands of customers. Given the importance of these companies in the development of countries' economies, this research provided a dynamic framework to examine the causal relationships between the factors affecting the incubation phase of the new products development process in these companies. By combining the DEMATEL technique and system dynamic approach, the dynamic model of new product development (NPD) process was developed. Results indicated that the most important factors affecting the incubation phase included: customer requirements, rework, and delay in the onset of the phases of NPD.

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