Entrepreneurial cyclical dynamics of open innovation

Abstract

This study addresses the following matters: What is the structure and mechanism of modern capital economic dynamics that motivates the growth limits of capitalism? The modern economy can be modeled as Entrepreneurial Cyclical Dynamics of Open Innovation with three sub-economies such as market open innovation by SMEs and start-ups, closed open innovation by big business, and social open innovation. When there is low balance among the three sub-economies, which is to say, if any of the sub-economies is too big, or too small, the economy dynamics decreases, and the economic growth rate slows down to nearly zero or even negative according to the model simulation. South Korea, with a low internal reserve policy, is in this situation. When there is medium balance among three sub-economies, which is to say, any of the sub-economies is big enough to lead the total economy but is not sufficiently big to control totally the other two economies, the economy dynamics increases and the economic growth rate will be maintained at a high level according to the model simulation. India, with its grassroots innovation festival, demonstrates this situation. When there is a high balance among the three sub-economies, which is to say, the three sub-economies are well balanced and there is no change in the economic system, the economy dynamics become too low and the economic growth rate stays at a low level according to the model simulation. Japan’s Hitachi is moving from this situation to a medium balance.

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Acknowledgements

This work was supported by the DGIST R&D Program of the Ministry of Science, ICT and Future Planning (16, and 17). This paper was first presented at ISS 2016, and SOItmC, and was fully updated based on several anonymous reviewers’ comments. JinHyo Joseph Yun has created original ideas and provided basic concepts, wrote the all the drafts, and has taken the role of first and corresponding author. KyungBae Park made the entrepreneurial cyclical dynamics causal model and mathematical model. DongKyu Won performed system dynamics simulations of total and individual cases. So, JinHyo Joseph Yun as corresponding author wants to point out KyungBae Park, and DongKyu Won as co-corresponding author together with the agreement of all authors.

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Correspondence to JinHyo Joseph Yun or KyungBae Park.

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Yun, J.J., Won, D. & Park, K. Entrepreneurial cyclical dynamics of open innovation. J Evol Econ 28, 1151–1174 (2018). https://doi.org/10.1007/s00191-018-0596-y

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Keywords

  • Entrepreneurial cyclical dynamics
  • Market open innovation
  • Closed open innovation
  • Social open innovation
  • New combination

JEL Classification

  • P16