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Why do we need open innovation?

JinHyo Joseph Yun Ph. D.
The President of SOItmC

1. Why do we need open innovation?

First of all, as the knowledge based economy develops, the areas of knowledge that are protected knowledge, protectable knowledge, and normal knowledge have all increased in the economy system. So, any firm can easily and cheaply obtain technologies that are required for the firm to innovate modern product and processes or to introduce new business models (Foray & Lundvall, 1998).
Second, the growth energy of the globally weakened economy can be recovered through open innovation. Surplus value or enterprise returns are diminishing. According to Kondratieff, despite economic fluctuation, every advanced capitalized economy system in the end arrives at the top of the growth chart right now. The concrete evidence for this is that interest rates, which indicate the price of capital, are approaching an actual value of zero (Freeman, 2011). The world’s economically developed major countries, including Korea, are showing true zero as the prevailing interest rate. In this zero interest rate era, open innovation can be a new trigger for economic growth. Open innovation lets firms find new breakthroughs by allowing them to look for new markets outside of their firm for their technology, or for new technology outside of the firm for new or more modern markets. Korea’s creative economic policy has several sub policies that are based on open innovation.
Third, the power law in the economy can be conquered by open innovation (Laherrere & Sornette, 1998), Nowadays, a small number of big companies obtain the majority of economic benefits in most of the growing and mature industries. Open innovation can give new entrants the chance to compete continuously with these big companies in new growing industries. In the end, open innovation will make new firms continuously emerge in new sectors and in the economy. Long tail phenomena can occur in diverse industries through the open innovation paradigm (Elberse, 2008).
Fourth, we can construct a creative economy through open innovation. A creative economy requires creative new products and processes introduced by new firms in various emerging sectors. Open innovation can allow a creative connection between technology and the market. As a result, several creative new products and processes will appear in the market. In the end, creative firms can appear, grow, and construct the creative economy (Howkins, 2002; Markusen, Wassall, DeNatale, & Cohen, 2008).

2. How can we vitalize open innovation at the national level or higher?

First, we should conquer the disconnect between the humanities and the social sciences culture, and the engineering and natural sciences culture. Mutual penetration between the two cultures can yield creative results in several industries, engineering sectors, and social sciences. If we conquer this two culture duality, as western countries and Japan have done in the 1950s-60s, we can vitalize open innovation through a convergence between the humanities and the social sciences and engineering and the natural sciences (Stokes, 1997; Tushman & O'Reilly, 2007).
Second, patent trolls should be allowed and should be constructed by Korean universities, national labs, and domestic firms in Korea (McDonough III, 2006; Risch, 2012). Patent trolling means that new technologies that are developed at universities and national labs can be compulsorily transferred to firms. In addition, every researcher in every national labs and every professor in universities can find a few more chances to commercialize their technologies through patent trolling. If Intellectual Ventures has a few more chances to buy patents from Korean national labs and universities, which receive research funds from the Korean government, new technology commercialization will increase dramatically in Korea. We can find evidence for this from the case of the U.S.

Third, business model patent production and utilization should be encouraged. Business model patents are creative bridges between technology and the market. So, an increase of business model patents will mean that more technologies can meet new markets creatively (Calia, Guerrini, & Moura, 2007; Chesbrough, 2012; Zott & Amit, 2008). According to U.S. business model patent increasing trends, business models concretely connect technologies and markets.

3. My research about open innovation from 2005 to 2014.

First, I built up the dynamics of the open innovation model. We should understand the dynamics of open innovation if we really want to introduce this as an innovation strategy for firms or as an innovation policy for countries. So, I built up a model that starts from open innovation, and moves through to a complex adaptive system, and on to evolutionary change (J. J. Yun & Cho, 2014).
Second, I analyzed the role of entrepreneurs in the introduction of open innovation at the firm level. Entrepreneurship should be well defined and made up of roles in any strong future open innovation policies.
Third, I formulated measurement methods for open innovation objectively. Open innovation in firms and nations should be measured objectively from the first if we are to introduce several open innovation policies and strategies.
Fourth, I developed a business model by developing circles through which anybody can make connections between technology and the market by himself. I developed several new business model patents, among which there are six that have been registered; seven have already been introduced by firms; and five have been used in new starts-up (Jin-Hyo Joseph Yun & Mohan, 2012; J.J. Yun, Nadhiroh, & Jung, 2013).
Fifth, I analyzed the open innovation effects within clusters and between clusters. Firms that belong to clusters should use a dynamic open innovation strategy according to the cluster situation. Nowadays, many firms are being founded in clusters. So, firms in clusters should introduce diverse and dynamic open innovation strategies according to cluster specific factors (Brem & Tidd, 2012; Schlossstein & Yun, 2008; Jin Hyo Joseph Yun, Dominik, & Lee; Jin hyo Joseph Yun, Park, Lim, & Hahm, 2010).
Sixth, I set up a philosophical background for the open innovation model using ideas from Whitehead, Popper, Deluze, and Taoism. From these, we can find out clues to increase open innovation attitudes among entrepreneurs and in the cultures of firms.
Seventh I set up a logical and mathematical base for open innovation using aspects of the prisoner’s dilemma and game theory. From these ideas, we can develop several simulation models and S.W. that can be applied to firms directly. We have to develop several SWs that can be used by firms to introduce open innovation strategies and open business models automatically.

4. Next research topics and mission to increase open innovation

First, we should develop Information Technology based open innovation strategy toolkits and business model developing toolkits. Even before this takes place, we should develop concrete open innovation effect analysis in a step by step manner. In the end, several SW toolkits will be introduced for open innovation strategies and for the development of business models.
Second, open innovation strategies and logic can be introduced in the field of Artificial Intelligence and next generation computing. Next generation computing depends on new ways of learning using computers. I think that open innovation logic can provide a creative learning mechanism for artificial intelligence. Already, I have made a basic model, called the “autonomous learning model for next generation computing and artificial intelligence, which is deduced from open innovation.”
Third, open innovation studies in economics, management, and policies should be increased on the global level in order to conquer the limits of capital and to introduce alternatives to the world economy. As a starting point, I have begun to organize the “Society of open innovation: technology, market, and complexity” and am preparing to publish the “Journal of open innovation: technology, market, and complexity” with a lot of my fellow researchers and professors from more than 25 countries.