Time for ‘Open Innovation’

International conference takes place to discuss ways of promoting “Open Innovation.”

The Ministry of Knowledge Economy held the “International Conference on Open Innovation and Technology Commercialization” at the Seoul Shilla Hotel on Nov. 19-20 to discuss ways of strengthening the nation’s R&D capabilities and raising outcomes through the spread of “Open Innovation.” Prof. Henry Chesbrough of UC Berkeley, who developed the theory of “Open Innovation,” and Kumar Patel, ex-vice president of AT&T Bell Laboratories, delivered keynote speeches. Eleven other experts on technology innovation and commercialization got together for the conference.
The following are excerpts of an interview between NewsWorld and Kim Yong-keun, president of the Korea Institute for the Advancement of Technology (KIAT), who touched on Korea’s strategies on technology commercialization for a nation with scarce resources.
Question: The significance of “open innovation” is getting greater. Will you comment on this?
A: These days, world-class corporations are rushing to shift their R&D paradigm from “closed innovation” to “open innovation” in order to secure global technology competitiveness and jump-start markets.
Figures released by Bain & Company on management tools trends in 2005 and 2007 showed that the portion of advanced firms that have changed to an open innovation system surged from 26 percent in 2004 to 53 percent in 2006.
Korea, with limited resources, needs to embrace open innovation strategies designed to utilize external resources in order to maximize its competitive edge. The nation, making investments equivalent to about 3 percent of global R&D outlays, needs to maximize its capacity by utilizing 97 percent of the diverse resources in other countries across the world.
To this end, it’s more important for us to have an open-minded attitude so that a variety of resources around the world can be utilized by discarding a closed-minded attitude and cooperating with several outside organizations.
Take a look into factors designed to make open innovation a success:
In terms of technology, technology commercialization projects based on a supply-oriented system for securing original technology, should change into ones focusing on such outside factors as market and technology beneficiaries.
In the area of monetary input, Korea’s R&D outlays account for 3.47 percent of the gross domestic product (GDP), ranking third in the world, but its productivity is low, so universities and firms are required to ramp up collaboration to raise productivity. In Korea, the technology transfer rate averaged 21.4 percent among public research institutions as of 2006, lower than the 35.9 percent in the United States and 46.8 percent in the EU, while the unused patent rate was 67 percent in Korea, higher than 64 percent in Japan and 35 percent in the United States.
In the area of manpower, gifted manpower is concentrated in universities, so steps should be taken to lure them into the research field of companies.
In the area of infrastructure, the globalization index on such tangible trade as import/export of goods remains high in Korea, but lower globalization of such intangible trade as technology imports and exports needs to be rectified.
If any of the four factors is insufficient, open innovation strategies would end in failure. Balanced development in the four areas could lead to success. In this regard, the KIAT plans to take into account the four factors in establishing policies on R&D and commercialization and for providing support.
Q: Will you tell us about how technology innovation strategy trends undergo changes in open innovation commercialization?
A: Advanced companies are pushing open-minded technology innovation strategies to overcome the difficulties facing in-house R&D activities in coping with rapidly changing technologies. They are striving to introduce ideas on products from outside exports or customers or to innovate management through a venture company spin-in or a spin-off for market verification.
Korean conglomerates, including Samsung and LG, tend to resort to close-minded technology innovation schemes by focusing on efforts to ramp up their in-house R&D capability. Samsung Electronics demonstrated open innovation success story cases; abruptly acquiring Trans Chip, an Israeli non-memory chip maker, in 2007 and purchasing a patent asset on the original technology of the LCD panel for $30 million from U.S. Claremont.
Companies in advanced countries are aggressively turning to the development of business models by maximizing the value of developed technologies though licensing-in/-out.
Q: Will you introduce the “Conference on Open Innovation Technology Commercialization,” which was held on Nov. 19-20?
A: The KIAT organized an international conference under the theme “Open Technology Innovation” at the Seoul Shilla Hotel on Nov. 19-20.
Prof. Henry Chesbrough of UC Berkeley, who created the theory “Open Innovation,” and Kumar Patel, ex-vice president of AT&T Bell Laboratories, delivered keynote speeches, and 11 experts on technology innovation and commercialization gave lectures and had active discussions during the conference that attracted approximately 500 Korean company officials in charge of technology innovation, academicians and representatives of venture capital firms from abroad. Special talk shows on open innovation and technology commercialization, investment consultation sessions on new growth engines and a session on the consultations on the importation of excellent Japanese technologies also took place.
The conference was sure to serve as a good opportunity not only to discuss Korea’s policies on technology innovation through collaboration and linking among industry, academic and research circles and the establishment of related strategies, but also to provide the momentum for the private sector and the government to join forces in pushing technology policies and strengthening national competitiveness in a way that can ensure co-prosperity.
Meanwhile, the opening ceremony of the conference had an event celebrating Korea joining the Europe Enterprise Network (EEN) in October as an Asian member.
EEN-Korea Network was set up by a consortium of five institutions including ETRI and the Small and Medium Business Corp. under the control of the Ministry of Knowledge Economy.
Korea’s entry into EEN is expected to facilitate technology exchanges and joint R&D activities between Korea and the United States and European countries. Korea plans to boost technology expert and network exchanges with advanced countries.
Following the opening ceremony, the conference commenced with a keynote speech by Prof. Chesbrough on open innovation and technology commercialization.
Four speakers in Session 1 gave lectures under the theme “Open Innovation Success Story Cases and Strategies in Technology Areas.” Three speakers of Session 2 delivered lectures on the topic “Each Region’s Implementation Strategies under the Open Innovation Paradigm and Responses.” European technology innovation experts spoke about “Multilateral R&D and Technology Commercialization Cooperation with Europe through Third-Party Countries’ Entry into EEN.”
Q: How does each country conduct bilateral cooperative projects these days?
A: Countries are now devoting themselves to securing technological competitiveness through the globalization of R&D activities. Major advanced countries focus a great portion of their R&D outlays on joint research projects, but Korea’s investment on joint R&D projects is still low. Figures released in July 2008 showed that Finland topped the portion of joint research with 54.1 percent, followed by 25 percent for Germany, 9.8 percent for Japan and 2.2 percent for Korea. EU countries are actively participating in multilateral joint R&D activities, which will surge to approximately 90 trillion won during the period between 2007 and 2013.
Korea’s international cooperative projects, costing an estimated 50 billion won as of 2009, involve joint international R&D activities for primarily supporting infrastructure for collaboration.
R&D cooperative projects depend on cooperation strategies differentiating from each country’s characteristics. For instance, the KORUS Tech is a program designed to strengthen competitiveness of technologies and advance industrial structure by yielding synergy effects from university-industry-institute cooperation between Korea and the United States. We set up and operate seven overseas cooperation centers in such countries as the United States, EU nations and China to explore joint R&D tasks, collect information on technology trends and broker cooperative companies.
The KIAT is striving to strategically explore technologies promising to have a huge potential for international cooperation through international industry technology cooperation guidance. We plan to explore the top 300 promising technology candidates, the top 100 cooperative institutions and the top 10 core cooperative e-nations for systematic support of future R&D tasks.
Q: Six months have passed since the KIAT was inaugurated after merging relevant institutions. Will you elaborate on this matter?
A: This is a year for consolidating six institutions, like converging six streams into a big river. This period is a time for fortifying the chemistry with each other among different cultures, different personnel/compensation systems and different business areas as well as for all to devote themselves to promote future development with concern and passion.
The integration of relevant R&D institutions is designed not only to ensure efficient reorganization, but also to create synergetic effects through the merging and restructuring of relevant business areas. Similar businesses will be merged and relevant ones will be overhauled to ensure organic connection, thus improving business execution processes in a customer-oriented and efficient fashion. It aims at ensuring a virtuous cycle of the industry technology ecosystem so each project can be executed in an integrated and converged manner and a review of diverse views from each office and division will take place.
We’re trying to establish a foundation for improving its standing as an integrated institution by converging a variety of compensation systems under a wider framework and establishing a business evaluation system as an integrated institution. nw

KIAT President Kim Yong-keun