Open Innovation: Technology,Market and Complexity in South Korea

Open Innovation, Complex Adaptive System and Evolutionary Change

The concept of open innovation has become increasingly popular in the management literature on technology and innovation at the micro level (Vanhaverbeke, Chesbrough, & West, 2014). In addition, Schumpeterian dynamics of open innovation has been proposed as a way to conquer the growth limits of capitalism at the macro level (Yun, 2015). But if you look into the open innovation, it motivates diverse level complex adaptive systems and in the end arrives at several evolutionary changes as depicted in Figure 1. We can call it open innovation, complex adaptive system and evolutionary change dynamics.

OPEN IN VIEWER

Figure 1

Source: Author’s own.

Open Innovation can occur at several steps in the knowledge funnel such as research and development (R&D), inside firm, market or society. Knowledge and trade flows of multinational corporations especially increase the linkages of foreign R&D centres with local and national institutions, thereby vitalising the R&D open innovation (Patra & Krishna, 2015). Open innovation, embedded in complex adaptive system, motivates several evolutionary changes at multi levels. Evolutionary changes in diverse levels receive effects from open innovation and give effects to open innovation. The whole perspective and concept of open innovation in a number of ways enables us to conquer the growth limits of economy. This is likely to happen through Open Innovation-Complexity Adaptive System-Evolutionary Change (OCE) dynamics which will impact the continuous interaction between open innovation economy, closed innovation economy and social innovation economy at the macroeconomic level (Yun, 2015).

Several themes on open innovation have been included in this special issue, which are based on theoretical and empirical methodological tools and analysis. The special issue begins with the article ‘From Open Innovation to Business Model: A View from South Korea’ by JinHyo Joseph Yun, JeongHo Yang and KyungBae Park. It basically attempts to answer the question as to how does one make a new business model in a knowledge-based economy? The article tries to build a research framework based on literature reviews. It then proceeds to perform practical experiments at DGIST during 2011–2015 to arrive at a ‘new’ business model. There are four different active business model building processes dealt with in this article. These are (a) customer open innovation-based business model developing circle; (b) user open innovationbased business model developing circle; (c) social entrepreneurship-based business model developing circle and (d) engineer open innovation-based business model developing circle. As demonstrated in this article, the four types of business model development toolkits, based on social experiments, can be seen as both suitable and applicable for the individuals’ current positions.

The article on ‘Factors Affecting Basic Research Performance Funded by Government: The Case of Creative Research Program (CRP) in South Korea’ by Youngsoo Ryu, Kwangseon Hwang and Sangok Choi examines factors affecting the performance of basic research in South Korea. As authors’ observed, they had limited knowledge regarding the influential factors for better R&D performance, particularly in South Korean context. This study investigated factors associated with performance of basic research (R&D programme). The analysis shows that CRP was found to be an efficient programme among the basic research programmes in South Korea. Moreover, leadership emerged as the most influential factor for better research performance. Consistent with previous research, knowledge sharing, autonomy, collaboration and creativity were also identified as meaningful factors affecting the research performance.

The article further explores the ways in which open innovation such as knowledge sharing or collaboration is also statistically valuable factors that impact the basic research. The results of this article have several policy implications. First, the feature of leadership should be well identified and evaluated when the programme is initiated and allocated to researchers or teams. During the research period, monitoring of leadership within the research team can be a practical solution for better research performance. Second, Western society and South Korea’s R&D success factors seem very similar to each other. This implies that there are no locally strong factors when explaining research performance. R&D management and performance is a relatively standardised field in the world. But further studies are required for the issue not covered in this study. R&D performance is influenced by multiple factors which have complex technological properties. Therefore, studies on the application of additional determinants based on performance data are needed.

The article on ‘Open Innovation Effort, Entrepreneurship Orientation, and their Synergies onto Innovation Performance in SMEs of Korea’ by JinHyo Joseph Yun, KyungBae Park, Janghyun Kim and Jeongho Yang focuses on the role of entrepreneurship in the open innovation process and its impact on innovation performance. The first finding is that the strength of the positive effect of open innovation depends on entrepreneurship and its essential roles on improving innovation performance. The second finding is that the entrepreneurship in Korean IT SMEs proved to have a synergy effect on the relationship between open innovation and firm performance. That is, the promotion of entrepreneurship is required first prior to the investigation of the individual open innovation strategies of firms or the construction of open innovation systems. Wherever the entrepreneurship of the firm leader is not high, the reverse situation can more effectively promote a positive relationship between open innovation in a firm and their performance.

Any firm that experiences the negative effects of open innovation may be due to transaction cost. As such, too much or too fast open innovation can decrease a firm’s performance. However, entrepreneurship can motivate the positive effects of open innovation. With this, if any firm wants to succeed in open innovation, the attention and support of the CEO, which we can collectively call as entrepreneurship, are required. Open innovation in the management level could not conquer a lot of tackles. The positive moderating effects of entrepreneurship to open innovation, which was analysed in this research, signify the importance of entrepreneurship in successfully realising open innovation.

Addressing a similar theme, the article on ‘How User Entrepreneurs Succeed: The Role of Entrepreneur’s Caliber and Networking Ability in Korean User Entrepreneurship’ by JinHyo Joseph Yun and KyungBae Park has the objective to reveal the important factors of successful user entrepreneurship by closely investigating two successful Korean user entrepreneurship cases. First, the importance of an entrepreneur’s caliber and networking ability was found. Second, in further developing user innovation technologically and commercially, the most important factor was an entrepreneur’s networking ability that can give access to complementary assets for successful development and commercialisation. Third, the innovation community, composed of related users and producers, has played a crucial role in the successful entrepreneurial process. Societies, which desire to be fuelled with new technological and economic development from user innovation and user entrepreneurship, can support the emergence and development of such innovation community through diverse methods. In addition, to encourage the entrepreneurial spirit of potential user entrepreneurs, policies must be made to lower the risk of failure.

On a related theme, the article on ‘Learning Organization Activities and Innovativeness of Tech-based SMEs within Korean Technoparks: The Mediating Role of Learning Transfer’ by Sanghyun Sung, Jaehoon Sung and Junghyun Yoon demonstrates that six dimensions of the learning organization activities (LOA) model have more validity or a better model fit than the previous seven dimensions of the LOA model. Furthermore, this study found that three important sub-variables of LOA (i.e., creating continuous learning opportunities, establishing systems to capture and share learning and providing strategic leadership for learning) have a positive and significant effect on learning transfer.

The results empirically confirm that the construct plays a pivotal role in creating an effective learning organisation. Thus, this research contributes to a theoretical extension of the consequences of LOA and of the antecedents of innovativeness. Furthermore, it emphasises that SMEs must pay more attention to maintaining and nurturing the LOA and on transferring the LOA to the workplace. This study is based on the studies of Watkins and Marsick (1993, 1996) and Yang, Watkins, and Marsick (2004), and their measurement instrument for LOAs remains valid. However, it is likely that their instrument has been used primarily for research and analysis of large companies.

The article on ‘Exploring Neglected Aspects of Innovation Function: Public Motivation and Non-pecuniary Values’ by Kwangho Jung, Seung-Hee Lee and Jane E. Workman explores an empirical link between public motivations and innovative attitudes to explore and allow new ideas. The first finding is that public interest, empathy, altruism and job involvement facilitate innovative attitude to pursue and accept new ideas and suggestions. The second finding is that there is a strong non-linear relationship between satisfaction, trust and innovative attitude. The third finding is that satisfaction for job or life is a significant factor to stimulate open innovative attitudes. In fact, self-motivations such as job satisfaction and engagement can contribute to stimulating innovative ideas and attitudes.

The last article on ‘The Effect of Regional Innovation Type on the Pursuit of Open Innovation in Korean Firms’ by Gwang Min Yoo and Sunjoo Kwak focuses on the regional aspects of open innovation. This article attempts to empirically investigate the firm and regional level determinants of a firm’s adoption of open innovation practices. In particular, the article categorises 16 Korean regions into seven regional innovation types to account for each region’s varying innovation conditions. Using data from the Korean Innovation Survey and a hierarchical linear model, the authors find that firm-level factors such as firm size, R&D innovation capability and the number of networks for absorbing external knowledge, and regional-level factors such as local government R&D funds matching had a significantly positive effect on open innovation.