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Special Issue "Sustainability and Open Innovation Capabilities of Firms for Value Chain Development"

A special issue of Sustainability (ISSN 2071-1050). This special issue belongs to the section "Economic, Business and Management Aspects of Sustainability".

Deadline for manuscript submissions: closed (31 December 2016)

Special Issue Editors

Guest Editor
Dr. JinHyo Joseph Yun

Soosung-gu GiSan-dong, Nokwon Apartment 102-1202, Daegu, Korea
Website | E-Mail
Phone: +82-53-785-4410
Interests: open innovation; business model; open innovation economy; social open innovation; schumpeterian dynamics; dynamics; game of life; knowledge; complexity
Guest Editor
Dr. Tan Yigitcanlar

School of Civil Engineering and Built Environment, Queensland University of Technology, 2 George Street, Brisbane, Queensland 4001, Australia
Website | E-Mail
Fax: +61 7 3138 1170
Interests: sustainable cities; sustainable urban development; sustainable and resilient infrastructure; sustainable transport system; sustainability assessment; sustainability indicators and frameworks; climate change; water sensitive urban design

Special Issue Information

Dear Colleagues,

This Special Issue includes selected studies that contribute to our understanding on how sustainability and open innovation capabilities in supply chain, such as network analysis, policy analysis, corporate sustainability, and so on, can lead to corporate survival and growth, and, hence, to the conditions of sustainability in its diverse aspects and dimensions. Corporate sustainability is usually accomplished with numerous factors. This Special Issue attempts to describe the conditions of sustainability in urban and firms’ environments—including the themes of open innovation, open business models, technology precincts, knowledge and innovation clusters, and so on. This Special Issue seeks to collect theoretical and empirical studies on complicated and dynamic investigations of the relation among open innovation, corporate survival, corporate growth, sustainability, and industrial clustering. By doing so, the Special Issue provides a better understanding of the role of sustainability and open innovation in firms—both start-ups and small and medium size enterprises.

Dr. JinHyo Joseph Yun
Dr. Tan Yigitcanlar
Guest Editors

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All papers will be peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 100 words) can be sent to the Editorial Office for announcement on this website.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Sustainability is an international peer-reviewed open access monthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 1400 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

  • open innovation;
  • natural environment;
  • sustainability;
  • autonomous;
  • conditions;
  • firms;
  • clusters

Published Papers (14 papers)

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Editorial

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Open AccessEditorial Open Innovation in Value Chain for Sustainability of Firms
Sustainability 2017, 9(5), 811; doi:10.3390/su9050811
Received: 28 April 2017 / Revised: 28 April 2017 / Accepted: 29 April 2017 / Published: 12 May 2017
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Abstract
This piece serves as the guest editorial of the Special Issue on the ‘Open Innovation in Value Chain for Sustainability of Firms’. Firstly, this editorial piece asks whether it is possible for firms to sustain their performance forever. Then, it reviews the popular
[...] Read more.
This piece serves as the guest editorial of the Special Issue on the ‘Open Innovation in Value Chain for Sustainability of Firms’. Firstly, this editorial piece asks whether it is possible for firms to sustain their performance forever. Then, it reviews the popular literature on the value chain. Afterwards, it develops a research framework for open innovation in the value chain, and proposes five ways of open innovation taking place within it. These include user open innovation, customer open innovation, common profit community, together growth community, and inner open innovation. Lastly, this editorial introduces articles from the Special Issue that concentrate on the various open innovation perspectives for firms to achieve sustainability. Full article
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Research

Jump to: Editorial

Open AccessArticle Policy Analysis to Reduce Climate Change-Induced Risks in Urban and Rural Areas in Korea
Sustainability 2017, 9(4), 524; doi:10.3390/su9040524
Received: 22 December 2016 / Revised: 24 March 2017 / Accepted: 25 March 2017 / Published: 30 March 2017
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Abstract
The purpose of this paper was to project changes in climate change-induced risks over time and to investigate policy alternatives to mitigate the risks from increases in sea level, heavy rains, and heat waves in urban and rural areas. System dynamics simulation was
[...] Read more.
The purpose of this paper was to project changes in climate change-induced risks over time and to investigate policy alternatives to mitigate the risks from increases in sea level, heavy rains, and heat waves in urban and rural areas. System dynamics simulation was used to build a model and conduct policy analysis for a simulation period over the years 2000–2050. The model was built with a focus on the interaction among three factors: damage restoration costs from heavy rains, heat waves, and sea level rise; the total cost of food imports due to decreases in arable land and agricultural productivity; and changes in the government budget to respond to climate change problems. A policy experiment was conducted with the model under four scenarios mainly based on the government budget for climate change. The results indicated, firstly, that the climate budget needs to be increased to at least 13 trillion Korean Won (US $11.6 billion) per year. Secondly, an earlier budget increase would more effectively reduce the total disaster restoration cost than a delayed budget increase. Third, if an earlier budget increase is difficult, the next best alternative would be to allocate a greater fraction of the climate budget to urban rather than to rural areas. Lastly, an early response to climate change would more effectively reduce food import costs, maintain agricultural productivity, and improve infrastructure for climate change adaptation than a delayed response. In conclusion, an earlier increase in the climate change budget would be more effective than a delayed budget increase of the same amount, and allocating a larger fraction of the climate budget to urban areas could be more cost-effective than increasing the budget, if urban and rural parties could agree on the method of allocation. Full article
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Open AccessArticle Public Debt, Corruption and Sustainable Economic Growth
Sustainability 2017, 9(3), 433; doi:10.3390/su9030433
Received: 13 December 2016 / Revised: 20 February 2017 / Accepted: 23 February 2017 / Published: 15 March 2017
Cited by 2 | PDF Full-text (905 KB) | HTML Full-text | XML Full-text
Abstract
There are many studies that look into the relationship between public debt and economic growth. It is hard to find, however, research addressing the role of corruption between these two variables. Noticing this vacancy in current literature, we strive to investigate the effect
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There are many studies that look into the relationship between public debt and economic growth. It is hard to find, however, research addressing the role of corruption between these two variables. Noticing this vacancy in current literature, we strive to investigate the effect of corruption on the relationship between public debt and economic growth. For this purpose, the pooled ordinary least squares (OLS), fixed effects models and the dynamic panel generalized method of moments (GMM) models (Arellano-Bond, 1991) are estimated with data of 77 countries from 1990 to 2014. The empirical results show that the interaction term between public debt and corruption is statistically significant. This confirms the hypothesis that the effect of public debt on economic growth is a function of corruption. The sign of the marginal effect is negative in corrupt countries, but public debt enhances economic growth within countries that are not corrupt, i.e., highly transparent. Full article
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Open AccessArticle Empirical Relationships among Technological Characteristics, Global Orientation, and Internationalisation of South Korean New Ventures
Sustainability 2016, 8(12), 1254; doi:10.3390/su8121254
Received: 31 August 2016 / Revised: 10 November 2016 / Accepted: 25 November 2016 / Published: 3 December 2016
Cited by 2 | PDF Full-text (400 KB) | HTML Full-text | XML Full-text
Abstract
International new ventures (INVs) that pursue rapid internationalisation have received a growing amount of attention worldwide. This study, therefore, examined characteristics of INVs, and hence investigated empirically the relationships among the technological characteristics of INVs, the characteristics of their chief executive officers (CEOs)
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International new ventures (INVs) that pursue rapid internationalisation have received a growing amount of attention worldwide. This study, therefore, examined characteristics of INVs, and hence investigated empirically the relationships among the technological characteristics of INVs, the characteristics of their chief executive officers (CEOs) (i.e., global orientation), and their internationalisation such as the level of internationalisation. The findings of this study can be summarised as follows: all of the technological characteristics (e.g., technological capacity, imitation, innovation, and standardisation) have significant effects on the internationalisation of INVs. Furthermore, the CEO’s global orientation mediated the relationship between the technological characteristics and internationalisation. Full article
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Open AccessArticle A Human-Needs-Based Dynamics to Simulate Technology Policy and Its Effects on Both Business Success and Human Happiness
Sustainability 2016, 8(12), 1225; doi:10.3390/su8121225
Received: 15 July 2016 / Revised: 15 November 2016 / Accepted: 16 November 2016 / Published: 25 November 2016
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Abstract
This paper focuses on how human needs are reflected in the market and how several technological and political policies affect the market share of government-supported industries, as well as the satisfaction of human desires and consequent happiness. In this paper, we seek to
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This paper focuses on how human needs are reflected in the market and how several technological and political policies affect the market share of government-supported industries, as well as the satisfaction of human desires and consequent happiness. In this paper, we seek to understand the dynamics of consumer decision-making processes in relation to technology products in the market. In this study, we present a new marketing model based on human needs, wants, and demands, and focus on both holistic and social perspectives. We have shown that human-based policy dynamics and sustainable human happiness can be realized by stimulating national policies for consumer happiness in the human-needs-based sector, e.g., the healthcare industry. Full article
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Open AccessArticle Perception of Time, Creative Attitudes, and Adoption of Innovations: A Cross-Cultural Study from Chinese and US College Students
Sustainability 2016, 8(11), 1193; doi:10.3390/su8111193
Received: 31 August 2016 / Revised: 23 October 2016 / Accepted: 9 November 2016 / Published: 18 November 2016
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Abstract
This study explores how earlier (vs. later) adopters of innovation differ in time perception and creative attitudes, comparing Chinese and US college students. Research on the perception of time and creative attitudes is useful to understand how sustainability and creative collaboration might work
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This study explores how earlier (vs. later) adopters of innovation differ in time perception and creative attitudes, comparing Chinese and US college students. Research on the perception of time and creative attitudes is useful to understand how sustainability and creative collaboration might work together. Various relationships exist between different levels of innovation adoption groups and creative attitudes or perceptions of time. We found that earlier adopters scored higher on economic time and future time orientation. This may indicate that earlier adopters are sensitive about their planned schedule. Also, earlier adopters with a future time orientation are forward-thinking and anticipate the introduction of new styles, items, or events in the future. We also find that Chinese (vs. US) participants scored higher on creative capacity and creative collaboration but did not differ in general creative attitudes or creative risk-taking. For all participants from these two countries, earlier adopters (vs. later) scored higher on all aspects of creative attitudes. This study suggests academic and practical implications regarding sustainability issues. From an academic perspective, this study adds a new perspective to the literature about the relationships among time of adoption, time perception, creative attitudes, and cultural values, and is especially useful for how these four variables influence sustainability. From a practitioner perspective, this study provides information of how consumer values and attitudes in a developing economy (China) and a developed economy (US) might facilitate open innovation and induce sustainability. Full article
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Open AccessArticle A Systematic Approach to Identify Promising New Items for Small to Medium Enterprises: A Case Study
Sustainability 2016, 8(11), 1158; doi:10.3390/su8111158
Received: 27 August 2016 / Revised: 25 October 2016 / Accepted: 3 November 2016 / Published: 10 November 2016
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Abstract
Despite the growing importance of identifying new business items for small and medium enterprises (SMEs), most previous studies focus on conglomerates. The paucity of empirical studies has also led to limited real-life applications. Hence, this study proposes a systematic approach to find new
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Despite the growing importance of identifying new business items for small and medium enterprises (SMEs), most previous studies focus on conglomerates. The paucity of empirical studies has also led to limited real-life applications. Hence, this study proposes a systematic approach to find new business items (NBIs) that help the prospective SMEs develop, evaluate, and select viable business items to survive the competitive environment. The proposed approach comprises two stages: (1) the classification of diversification of SMEs; and (2) the searching and screening of business items. In the first stage, SMEs are allocated to five groups, based on their internal technological competency and external market conditions. In the second stage, based on the types of SMEs identified in the first stage, a set of alternative business items is derived by combining the results of portfolio analysis and benchmarking analysis. After deriving new business items, a market and technology-driven matrix analysis is utilized to screen suitable business items, and the Bruce Merrifield-Ohe (BMO) method is used to categorize and identify prospective items based on market attractiveness and internal capability. To illustrate the applicability of the proposed approach, a case study is presented. Full article
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Open AccessArticle Does Technology Transfer Help Small and Medium Companies? Empirical Evidence from Korea
Sustainability 2016, 8(11), 1119; doi:10.3390/su8111119
Received: 25 August 2016 / Revised: 21 October 2016 / Accepted: 27 October 2016 / Published: 1 November 2016
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Abstract
We challenge the view that technology transfer from big companies to small and medium (SM) size companies helps SM companies to prosper. With a large dataset of SM companies in Korea, we utilize the stochastic production frontier (SPF) model to examine the productivity
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We challenge the view that technology transfer from big companies to small and medium (SM) size companies helps SM companies to prosper. With a large dataset of SM companies in Korea, we utilize the stochastic production frontier (SPF) model to examine the productivity of inputs and the generalized linear model (GLM) to compare business performance between two groups of SM companies: SM companies that receive technology transfer and those that do not receive technology transfer from big companies. The empirical results demonstrate that the transfer of technology from big companies to SM companies help SM companies to enjoy productivity of capital. Nonetheless, SM companies receiving technology transfer were found to underperform in terms of labor productivity and profit margin compared to their counterparts. We further investigate the reasons why SM companies receiving technology transfer from big companies underperform relative to their counterparts, and our findings shows that the former do not export much of their product and face more difficulties such as lower price for their products imposed by big companies than the latter. By identifying the negative rather than the conventionally assumed positive effect of technology transfer, this paper contributes to the literature on the relationship between technology transfer and SM companies’ prosperity in the case of Korea. Our findings have important implications for how SM companies should strategize and rethink about the clauses embedded in the transfer of technology that they receive from big companies because technology transfer plays as a barrier to their prosperity. Full article
Open AccessArticle Diffusion Patterns in Convergence among High-Technology Industries: A Co-Occurrence-Based Analysis of Newspaper Article Data
Sustainability 2016, 8(10), 1029; doi:10.3390/su8101029
Received: 17 June 2016 / Revised: 28 September 2016 / Accepted: 29 September 2016 / Published: 14 October 2016
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Abstract
Firms in high-technology industries have faced great technological and market uncertainty and volatility in the past few decades. In order to be competitive and sustainable in this environment, firms have been pursuing technological innovation, product differentiation, vertical integration, and alliances, which eventually drive
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Firms in high-technology industries have faced great technological and market uncertainty and volatility in the past few decades. In order to be competitive and sustainable in this environment, firms have been pursuing technological innovation, product differentiation, vertical integration, and alliances, which eventually drive industry convergence, defined as the process of blurring boundaries between previously distinct industries. Although industry convergence has greatly affected industrial structure and the economy, little research has investigated this phenomenon, especially its diffusion patterns; thus, it is still unclear which industries are converging more rapidly or have a higher potential for convergence. This paper explores these issues by investigating industry convergence in U.S. high-technology industries, using a large set of newspaper articles from 1987 to 2012. We perform a co-occurrence-based analysis to obtain information on industry convergence and estimate its diffusion patterns using an internal-influence logistic model. We find heterogeneous diffusion patterns, depending on convergent-industry pairs and their wide dispersion. In addition, we find that the potential degree of industry convergence is significantly negatively associated with its growth rate, which indicates that a great deal of time will be required for industry convergence between high-technology industries with this high potential to achieve a high degree of convergence. Full article
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Open AccessArticle Technology for Production Scheduling of Jobs for Open Innovation and Sustainability with Fixed Processing Property on Parallel Machines
Sustainability 2016, 8(9), 904; doi:10.3390/su8090904
Received: 29 June 2016 / Revised: 14 August 2016 / Accepted: 30 August 2016 / Published: 7 September 2016
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Abstract
In this paper, a technology for production scheduling is addressed for the sustainability and open innovation in a manufacturing business. Methodologies for scheduling jobs on parallel machines with the fixed processing property are devised. The fixed processing property, in which a group of
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In this paper, a technology for production scheduling is addressed for the sustainability and open innovation in a manufacturing business. Methodologies for scheduling jobs on parallel machines with the fixed processing property are devised. The fixed processing property, in which a group of specific jobs can be processed on the predetermined machine, can be found in most manufacturing systems due to the quality issues. Usually, even though parallel machines can process various types of jobs, the fixed processing is preferred as to not deteriorate products’ quality in real manufacturing systems. To minimize makespan of jobs, which is defined as the final completion time of all jobs, technology for production scheduling is developed. Several heuristic algorithms are devised for solving the problem and to evaluate performance of the suggested algorithms, a series of computational experiments is performed. Results show that better solutions are obtained by the suggested algorithms in a reasonable amount of computation time. That is, if the proposed technology is applied to the production scheduling system of a real manufacturing business, it can be expected that quantity and quality of the product will be enhanced since they are influenced by the production scheduling. Full article
Open AccessArticle Patent-Enhancing Strategies by Industry in Korea Using a Data Envelopment Analysis
Sustainability 2016, 8(9), 901; doi:10.3390/su8090901
Received: 25 July 2016 / Revised: 28 August 2016 / Accepted: 31 August 2016 / Published: 6 September 2016
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Abstract
Global competition has increased the importance of patents as a means to protect and strengthen technology and competitiveness. The purposes of our study were to identify what industries in South Korea are strong or weak in terms of patent applications and to identify
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Global competition has increased the importance of patents as a means to protect and strengthen technology and competitiveness. The purposes of our study were to identify what industries in South Korea are strong or weak in terms of patent applications and to identify some strategies to enable weak industries to become strong. For this, we gathered statistics on seven variables as follows: number of businesses, number of employees, research and development investment, number of full-time equivalent researchers, number of research institutions, domestic market size, and number of patent applications. Especially, to compare the ratio of patent applications and the ratio of domestic market size across industries, the industries were classified into the following three categories: strong-, weak-, and no-patent. Furthermore, data envelopment analysis (DEA) suggested some strategies to strengthen patent applications for each industry. In the DEA analysis, the number of patent applications was used as the output variable and the other six variables were used as input variables. Our study will particularly assist industries where protection by patents is an important aspect of their businesses. Full article
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Open AccessArticle Early Adoption of Innovative Analytical Approach and Its Impact on Organizational Analytics Maturity and Sustainability: A Longitudinal Study from a U.S. Pharmaceutical Company
Sustainability 2016, 8(8), 808; doi:10.3390/su8080808
Received: 18 May 2016 / Revised: 21 July 2016 / Accepted: 8 August 2016 / Published: 17 August 2016
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Abstract
We investigate the impact of early adoption of an innovative analytics approach on organizational analytics maturity and sustainability. With the sales operation planning involving the accurate determination of physician detailing frequency, multiple product sequencing, nonlinear promotional response functions and achievement of the right
[...] Read more.
We investigate the impact of early adoption of an innovative analytics approach on organizational analytics maturity and sustainability. With the sales operation planning involving the accurate determination of physician detailing frequency, multiple product sequencing, nonlinear promotional response functions and achievement of the right level of share of voice (SOV), an analytical approach was developed by integrating domain knowledge, neural network (NN)’s pattern-recognition capability and nonlinear mathematical programming to address these challenges. A pharmaceutical company headquartered in the U.S. championed this initial research in 2005 and became the first major firm to implement the recommendations. The company improved its profitability by 12% when piloted to a sales district with 481 physicians; then it launched this approach nationally. In 2014, the firm again gave us its data, performance of the analytical approach and access to key stakeholders to better understand the changes in the pharmaceutical sales operations landscape, the firm’s analytics maturity and sustainability of analytics. Results suggest that being the early adopter of innovation doubled the firm’s technology utilization from 2005 to 2014, as well as doubling the firm’s ability to continuously improve the sales operations process; it outperformed the standard industry practice by 23%. Moreover, the infusion of analytics from the corporate office to sales, improvement in management commitment to analytics, increased communications for continuous process improvement and the successes from this approach has created the environment for sustainable organizational growth in analytics. Full article
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Open AccessArticle Not Deep Learning but Autonomous Learning of Open Innovation for Sustainable Artificial Intelligence
Sustainability 2016, 8(8), 797; doi:10.3390/su8080797
Received: 25 May 2016 / Revised: 25 July 2016 / Accepted: 2 August 2016 / Published: 13 August 2016
Cited by 5 | PDF Full-text (3031 KB) | HTML Full-text | XML Full-text
Abstract
What do we need for sustainable artificial intelligence that is not harmful but beneficial human life? This paper builds up the interaction model between direct and autonomous learning from the human’s cognitive learning process and firms’ open innovation process. It conceptually establishes a
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What do we need for sustainable artificial intelligence that is not harmful but beneficial human life? This paper builds up the interaction model between direct and autonomous learning from the human’s cognitive learning process and firms’ open innovation process. It conceptually establishes a direct and autonomous learning interaction model. The key factor of this model is that the process to respond to entries from external environments through interactions between autonomous learning and direct learning as well as to rearrange internal knowledge is incessant. When autonomous learning happens, the units of knowledge determinations that arise from indirect learning are separated. They induce not only broad autonomous learning made through the horizontal combinations that surpass the combinations that occurred in direct learning but also in-depth autonomous learning made through vertical combinations that appear so that new knowledge is added. The core of the interaction model between direct and autonomous learning is the variability of the boundary between proven knowledge and hypothetical knowledge, limitations in knowledge accumulation, as well as complementarity and conflict between direct and autonomous learning. Therefore, these should be considered when introducing the interaction model between direct and autonomous learning into navigations, cleaning robots, search engines, etc. In addition, we should consider the relationship between direct learning and autonomous learning when building up open innovation strategies and policies. Full article
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Open AccessArticle Network Analysis of Open Innovation
Sustainability 2016, 8(8), 729; doi:10.3390/su8080729
Received: 25 May 2016 / Revised: 4 July 2016 / Accepted: 13 July 2016 / Published: 30 July 2016
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Abstract
The way people innovate and create new ideas and bring them to the market is undergoing a fundamental change from closed innovation to open innovation. Why and how do firms perform open innovation? Firms’ open innovation is measured through the levels of firms’
[...] Read more.
The way people innovate and create new ideas and bring them to the market is undergoing a fundamental change from closed innovation to open innovation. Why and how do firms perform open innovation? Firms’ open innovation is measured through the levels of firms’ joint patent applications. Next, we analyze network structures and characters of firms’ joint patent applications such as betweenness and degree centrality, structure hole, and closure. From this research, we drew conclusions as follows. First, the structure of collaboration networks has both direct and indirect effects on firms’ innovative performance. Second, in the process of joint patent applications, there is a long tail phenomenon in networks of joint patent applications. Third, the number of patents and International Patent Classification (IPC) subclasses together constitute a meaningful measure of the innovation performance of firms. Full article
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Planned Papers

The below list represents only planned manuscripts. Some of these manuscripts have not been received by the Editorial Office yet. Papers submitted to MDPI journals are subject to peer-review.

Title: Perception of Time, Creative Attitudes, and Adoption of Innovations: Comparing Chinese and US College Students
Authors: Seung-Hee Lee (Southern Illinois University), Jane Workman and Kwangho Jung
Abstract: The purpose of this study was to examine how the adoption of innovations are influenced by time perception and creative attitudes. Creativity is linked to innovation, which creates value. Creativity refers to mental and social processes, powered by conscious or unconscious insight, that yield new ideas, concepts, and associations (Serrat, 2009). Innovation is an outcome of the creative process, in which the ideas, concepts, and associations are applied to products, services, procedures, and processes that are desirable and viable within a specific context (Serrat, 2009). Innovation can be applied in many different contexts. In this study, we use the context of fashion innovation to examine how time of adoption of fashion innovations is influenced by time perception and creative attitudes within two cultures: China and the U.S.
Individuals who create and individuals who innovate may have different attributes and perspectives. For example, Usunier and Valette-Florence (2007) have found that time perception can predict values, activity planning, materialism, and consumer behavior. Further, there are relationships between values and variables influencing consumer behavior, such as attitudes (Homer and Kahle, 1988), emotions (Laverie et al., 1993) and innovativeness (Roehrich et al., 1989). Graham (1981) proposed different cultural models of time and their consequences on consumer behavior. In addition to culture, many other external variables influence time perception (e.g., social structure, economic situation, legislation). Settle et al. (1978) studied the impact of individual time orientations on lifestyles and consumption decisions. The ability to create and innovate novel and appropriate things is critical to business success. Indeed, creativity and innovation are vital not only for business success but for survival.
H1a-h: Time of adoption of innovations will be affected by time perceptions (a) economic time; (b) non-organized time; (c) orientation toward the past; (d) orientation toward the future; (e) time submissiveness; (f) time anxiety; (g) tenacity; and (h) preference for quick return.
H2a-h: Chinese and U.S. participants will differ in time attitudes (a) economic time; (b) non-organized time; (c) orientation toward the past; (d) orientation toward the future; (e) time submissiveness; (f) time anxiety; (g) tenacity; and (h) preference for quick return.
H3 a-d: Time of adoption of innovations will be affected by creative attitudes: (a) general creative attitudes; (b) creative capacity; (c) creative collaboration; and (d) creative risk-taking.
H4 a-d: Chinese and U.S. participants will differ in creative attitudes: (a) general creative attitudes; (b) creative capacity; (c) creative collaboration; and (d) creative risk-taking.
H5: Chinese and U.S. participants will differ in time of adoption of innovations.
Method. Data were collected in large lecture classes from US and Chinese university students who took about 20 minutes to complete the questionnaire. Participants circled a number on a 7-point scale (7 = strongly agree; 1 = strongly disagree) to indicate degree of agreement with each item. The questionnaire contained demographic items, measures of time styles (Usunier and Valette-Florence, 1994, 2007), creative attitudes (Serrat, 2009) and fashion innovativeness and opinion leadership (Hirschman and Adcock, 1978). Descriptive statistics, Cronbach’s alpha reliability, MANOVA/ANOVA, and regression analyses were conducted to analyze the data.
Based on the data analysis, empirical results, new findings, and implications would be discussed at the coming conference.

Title: Policy Analysis to Reduce Climate Change Induced Risk in Urban and Rural Areas
Authors: TaeHoon Moon, DongHwan Kim, ChangSug Park and DongSung Lee
Extended Abstract:
Purpose/Research Question:
Climate change is one of the most impending issues that human beings are facing in the 21st century. Average temperature increase of the Earth climate will have detrimental impacts on environmental, as well as social and economic, areas. According to the IPCC, even if the global average temperature increase is successfully limited to 2 °C, it is expected that more than two billion people will suffer from water shortage, and 20%–30% of bio species will be extinct. Even worse, the impact of climate change on the Korean peninsula will be more serious than that of the global average. In this context, this study aims to project changes in climate change induced risk over time in urban and rural area, and to explore policies to mitigate those risk. Climate change induced risks in this study include heavy rain, heat wave, and sea level rise.
Key Literature Reviews:
Research on climate change is abundant, with diverse focus and interests. However, most studies are focusing on specific areas with certain academic disciplines, without paying due attention to the interrelated and interactive nature of climate change impact on environmental, social, and economic areas. At a highly aggregated level, studies on integrated models on climate change impact have been active, most notably from economists. In addition, system dynamic models on climate change have also been actively developed, reflecting more faithfully the interactive and interrelated nature of climate change impact on related areas. The world model developed from the study of Limit to Growth (Forrester, 1971; Meadows, et.al., 1972, 1974, 1992, 2004; Randers, 2012) provided good fundamentals of later developed climate change models. Those models include Threshold 21 by the Millennium Institute, the Climate Rapid Overview And Decision Support (C-ROADS) model (Sterman, Fiddaman, et.al., 2012), Behavioral Climate-Economy model (Fiddaman, 1997, 2002), etc. Together with these aggregated world level of dynamics model, relatively small and regional level of climate change impact models have also been developed (Huerta et al., 2011). This study also aims to analyze impact of climate change and explore policy options to mitigate climate change induced impact. The model is a national level one and its focus is to explore strategies to reduce risk induced by climate change.
Design/Methodology/Approach:
System dynamics simulation method was used to build model and to conduct policy analysis with simulation period from year 2000 to 2050. Model was built with focus on interaction among three sectors: Damage restoration cost from heavy rain heat wave and sea level rise, total cost of food import due to decrease in arable land and agricultural productivity, and changes in government budget to respond these problems.
Policy experiment with system dynamics model was conducted using three scenarios based on government budget for climate change adaptation. The first scenario is allocating 10 trillion Korean Won (roughly 10 billion $US) government budget for climate adaptation from the year 2000. The second scenario is allocating same amount of climate adaptation budget from 2011. The third one is allocating budget from 2011 as with the second scenario and increase the budget by 5 trillion Korean Won (roughly 5 billion $US) every year from 2020. The first scenario could be called an “early response scenario”, the second one is a “delayed response scenario”, and the last one can be called a “delayed response with budget increase scenario”.
Findings/Results:
Result of simulation analysis shows that the total climate change induced damage restoration cost was minimized with scenario 1. Total damage restoration cost in the year 2050 was projected less than 5 trillion Won with scenario 1, over 20 trillion Won with scenario 2, and under 20 trillion Won with scenario
3. Research limitations/Implications:
Simulation results indicate that, to be effective in risk reduction from climate change impact, it is far better to spend a government budget earlier. Further, earlier government expenditure also contributed to the reduction of food import costs. It was because by investing government budget earlier to restore damaged areas and to improve agricultural infrastructure in advance for preparation of climate change, arable land damage and decline in agricultural productivity was minimized.
Implications of the study results are as follows: First, climate change induced risks can be managed properly if policy response is made at an early time. Early response to climate change could reduce natural disaster restoration cost and this could free more of a government’s budget for infrastructure improvement for climate change adaptation and thereby reduce restoration costs further, forming a virtuous cycle. Second, if governments fail to prepare an early response, a system can be under the influence of a vicious circle. With no proper preparation for climate change, natural disaster damage and restoration costs increase rapidly, and the government budget available for climate change adaptation decreases, leading to a further increase in climate change induced damages. Third, delayed policy response to climate change is not effective, even if a government budget is substantially increased. In summary, earlier response to climate change is more effective than a delayed policy response with a larger budget.
These findings are consistent with previous research on climate change. IPCC reports and existing studies show that the earlier government spending on climate change could substantially save climate change mitigation and adaptation costs. Additionally, in this study, earlier government response was proven to substantially limit climate change damage restoration costs. In addition, this study shows that early response is more effective in reducing food import costs, maintaining agricultural productivity, and improving infrastructure for climate change adaptation.
Keywords: climate change policy; risk management; system dynamics modeling; urban and rural areas

Title: Early Adaption of Innovative Analytical Approach and Its Impact on Organizational Analytics Maturity and Sustainability of Analytics: A Longitudinal Study from a US Pharmaceutical Company
Authors: John C. Yi 1,* and Sungho Kim 2
Affiliations: 1 Associate Professor of Business Analytics, Department of Decision and System Sciences, Haub School of Business, Saint Joseph’s University, Philadelphia, PA 19131, USA; 2 Department of Decision and System Sciences, Haub School of Business, Saint Joseph’s University, Philadelphia, PA 19131, USA; E-Mail: sk548058@sju.edu; * Author to whom correspondence should be addressed; E-Mail: jyi@sju.edu; Tel.: 610-660-2238; Fax: 610-660-1192.
Abstract: We investigate the impact of early adaption of an innovative analytical approach to improve pharmaceutical sales operations. With the sales operations planning involving the accurate determination of physician detailing frequency, multiple products sequencing, nonlinear promotional responsiveness of physicians, and achieving the right level of share of voice, the analytical approach, first introduced in 2005, is developed by integrating domain knowledge, neural network’s pattern-recognition capability, and nonlinear mathematical programming. A large US pharmaceutical company championed this initial research and became the first major firm to implemented the recommendations in 2005 and improve their profitability by 12% when piloted to a sales district with 481 physicians, then launched this approach nationally. In 2014, the firm again gave us their data, performance of the analytical approach, and access to key stakeholders to better understand the changes in the pharmaceutical sales operations landscape, the firm’s analytics maturity, and sustainability of analytics. Results suggest that being the early adaptor of the innovation doubled the firm’s Technology Utilization from 2005 to 2014, as well as doubling the firm’s ability to Continuously Improve the Sales Operations Process, and outperformed the standard industry practice by 23%. Moreover, the infusion of analytics from the corporate office to sales, improvement in management commitment to analytics, increased communications for continuous process improvement, and the successes from this approach have created the environment for sustainable organizational growth in analytics.

Title: Technology for Production Scheduling of Jobs for Open Innovation and Sustainability With Fixed Processing Property on Parallel Machines
Authors: SangOh Shim and KyungBae Park (Corresponding author)
Abstract: Nowadays, one of the most important thing for smart factory which is raised in the field of manufacturing is an intelligent production scheduling, how to schedule jobs effectively and efficiently to maximize production quantity and quality, customer satisfaction and so on. Especially, such efforts are getting more necessary in the growing importance of open innovation and sustainable operating system. In this paper, a technology for production scheduling of jobs in manufacturing systems is addressed. We proposed several heuristic algorithms for scheduling jobs on parallel machines with the fixed processing property in which a group of specific jobs can be processed on the predetermined machine. This property can be found at the most manufacturing systems which produce state-of-art technology goods, such as semiconductors, liquid crystal display and so on due to the quality issues. Usually, even though it is known that parallel machines can process various types of jobs, fixed processing are preferred not to deteriorate products’ quality in real manufacturing systems. Also, in this problem, when changing process of different groups of jobs, operations for changing type of groups, called as setup, are necessary.
To minimize makespan of jobs, in which is defined as final completion time of all jobs, technology for production scheduling is developed, that is, several heuristic algorithms are devised for solving the problem considered here. To evaluate performance of the suggested algorithms, a series of computational experiments are performed on a number of randomly generated test problems and results show that better solutions are obtained by the suggested algorithms in a reasonable amount of computation time in terms of solution quality. Therefore, if we can apply the proposed technology to the production scheduling system in real manufacturing systems, it can be expected that production quantity and quality are enhanced since they are influenced by the production scheduling rules.
Keywords: technology; sustainability; open innovation; manufacturing; heuristics; production scheduling; parallel machines

Title: Human Need based Market Simulation to Test Technology Policy; for Success of Business and for Happiness of Consumer
Authors: DongKyu Won and JongYeon Lim
Abstract: The market is working efficiently through the development of new products and technologies that reflect the interaction of businesses and the needs of consumers.
The different innovation is generated in this process. In this paper, we want to understand the dynamics of the consumer decision-making of technology products in the market by simulating these market conditions through the ABM model.
In particular, we would like to present the direction of technological innovation in the country, through the market model for developing technologies and products that maximize the utility value of the consumer, for pharmaceutical market as an example.
Keywords: human need; happiness of consumer; success of business; purchase decision; network model; diffusion model; agent-based model

Title: Investigation of Key Factors and Leading Indicators on Chemistry Sector’s Firm Performance: Focus on Petrochemistry and Fine Chemicals
Authors: Dongphil Chun, Youngseok Lee, Ji-One Park and Youngjoo Ko
Extended Abstract:
Purpose—The purpose of this paper is to investigate which factors are key factors and leading indicators on chemistry sector’s performance. The chemistry sector is divided into petrochemistry and fine chemicals.
Key literature review—
(1) Wang, Hsiao-Wen, and Ming-Cheng Wu. "Business type, industry value chain, and R&D performance: Evidence from high-tech firms in an emerging market." Technological Forecasting and Social Change 79.2 (2012): 326-340.
(2) Hsu, Ya-Hui, and Wenchang Fang. "Intellectual capital and new product development performance: The mediating role of organizational learning capability." Technological Forecasting and Social Change 76.5 (2009): 664-677.
(3) Sung, Tae Kyung, and David V. Gibson. "Critical success factors for business reengineering and corporate performance: the case of Korean corporations." Technological Forecasting and Social Change 58.3 (1998): 297-311.
(4) Epicoco, Marianna, Vanessa Oltra, and Maïder Saint Jean. "Knowledge dynamics and sources of eco-innovation: Mapping the Green Chemistry community." Technological Forecasting and Social Change 81 (2014): 388-402.
Design/methodology/approach—This research focuses on the financial performance and financial factors on chemistry sector. We collect financial information of Korean chemistry firms from the KIS value data that is database about Korean firms’ financial and stock market information. Financial performance is measured with respect to growth, profitability, turnover, and stability. The authors are trying to investigate the relationship between financial factors and financial performance. In order to analyse these factors, tangible assets and intangible assets that are fixed assets, cashable assets, R&D investment, and so on, we apply multiple regressions analysis. Petrochemistry and fine chemical sectors are analyzed independently.
(Expected) Findings—First of all, fine chemical firms’ sizes are smaller than petrochemistry firms. However, interestingly, fine chemical firms’ sizes of intangible assets are bigger than those of petrochemistry firms. Furthermore, key factors on financial performance are different by sector. Intangible assets (such as R&D investment) have a positive relationship with financial performance within the fine chemical sector. On the other hand, fixed assets and cashable assets have a positive effect on petrochemistry firms’ financial performance. Lastly, R&D investment is investigated about leading indicator of petrochemistry and fine chemicals sector.
Research limitations/implications—This paper did not consider external environmental factors, such as institutional environment, level of technology, and other factors that may have a relationship with firm performance and financial factors. However, this research investigates differences in financial structures and characteristics of the Korean petrochemistry and fine chemical sectors. This strongpoint can contribute to firm decision makers and policy makers to improve chemistry firms’ performance.
Practical implications—Up to the present, the Korean government has been trying to support the chemistry sector. The petrochemistry sector has a key role in the growth of the Korean economy. However, the fine chemical sector has received attention as a new growth engine within the chemistry sector in Korea. At this point in time, our research can provide valuable information to the decision-making of firms and the government to develop the chemistry sector.
Originality/value—This research is pioneering research to investigate differences in the Korean petrochemistry and fine chemical sectors. Furthermore, findings in leading indicators provide insights in both academic and practical fields.
Keywords: chemistry sector; petrochemistry; fine chemicals; firm performance; key factors; leading indicators
Paper type—Research paper

Title: Network Analysis of Open Innovation
Authors: JinHyo Joseph Yun, SooIn Lee, EuiSeob Jeong, JinSeu Park and JiYoung Park
Abstract: The way that people innovate and create new ideas and bring them to the market is undergoing a fundamental change, from closed innovation to open innovation. Why and how do firms perform open innovation? Firms’ open innovation is measured through the levels of firms’ joint patent applications. Next, we analyze network structures and characters of firms’ joint patent applications, such as betweenness and degree centrality, structure hole, and closure.
From this research, we drew four conclusions. First, the structure of collaboration networks has both direct and indirect effects on firms’ innovative performance. Second, in the process of joint patent applications, there is a long tail phenomenon in networks of joint patent applications. Third, the number of patents and IPC subclasses together constitute a meaningful measure of the innovation performance of firms.
Keywords: joint patent application; the structure of collaboration; open innovation; long tail

Title: Motivators of Management by Walking Around and Communicational Factors Behind Them: A Case Study on a Korean Shipyard
Authors: Yeoeun Kwon (UK), Taehoon Kwon (Corr.), Hun Park, Hyuk Hahn and Ilhyung Lee
Abstract: This case study was conducted with a team of senior managers at a Korean shipyard in an effort to elicit an open innovation platform for implementing management by walking around (MBWA) and communicational factors arising within them. To identify the key motivators and communication issues associated with them, a theoretical framework was produced based on the key tensions of social psychology of communication and upward communication, as well as modern organizational theories.
For this qualitative research analysis, 12 semistructured interviews were conducted face-to-face with the executives; the data were then supplemented by five field observations during MBWAs at the shipyard. Coding frame was used to organize modal salient themes for thematic analysis. The organizational and individual motivators identified of the MBWA campaign at the Korean shipyard were then analyzed in-depth to elicit communicational factors underlying these motivators, producing secondary findings that will be discussed later in this report. While identifying 10 salient motivators as organizing themes, the research concludes that MBWA is an open innovation platform of management strategy intended to promote upward communication within organizations.
Purpose/Research Question:
Can MBWA bring the open innovation platform for management?

  1. What are the organizational and individual motivators of MBWA?
  2. What are the communicational factors underpinning these motivators?

Key Literature Reviews (About 3–5 papers):
With the broader insight into the management by walking around comprising communication intentionality, this chapter intends to outline issues in organizational communication deriving from concepts of social psychology and organizational studies. Organizational communication is a product of dynamic activities that arise in a social group bound by shared strategic goals. Despite the growing popularity and significance of this subject, there has been little research that incorporates communication theories within the ecological context of organizations. Therefore, understanding the broader landscape of organizations and communication issues pursuant to them will enrich the discussions about this emerging management concept.
Design/Methodology/Approach:
In this paper, we analyzed MBWA as an open innovation platform of management. Twelve semistructured interviews were conducted face-to-face with the executives; the data were then supplemented by five field observations during MBWAs at the shipyard. Coding frame was used to organize modal salient themes for thematic analysis. The organizational and individual motivators identified of the MBWA campaign at the Korean shipyard were then analyzed in-depth to elicit communicational factors underlying these motivators
(Expected) Findings/Results:
MBWA brings open innovation to management. At the organizational level, the management turned to MBWA to fight with (a) ambiguity of ownership and governance structure, (b) traditional conduct of command and control, (c) ramifications of an expedited reorganization, and (d) deterioration of the labor-management relations. At the individual level, the management leveraged the MBWA campaign to achieve leadership objectives, such as (a) monitoring and identifying issues in worksites, (b) building positive employee relations, (c) building the data system and sharing feedbacks related to the issues identified, (d) directly involving in and mediating with issues of conflict, (e) exercising the role of teaching and mentoring, and (f) generating positive storytelling via word-of-mouth.
Research limitations/Implications:
The culture and setting cannot be underestimated. While the case study approach allows an in-depth analysis of a single organization and social trend, the limitations of a skewed balance in gender, nationality, and locations tend to diminish its generalizability. It is especially pronounced in terms of national culture values (Hofstede, 1984), which could not be tackled in this study. Parallels from multiple cases will be conducive to improved generalizability.
Keywords: open innovation; platform; management by walking around; Korean shipyard

Title: Not Deep Learning but Autonomous Learning of Open Innovation for Sustainable Artificial Intelligence
Authors: JinHyo Joseph Yun, PhD (Corr.), DooSeok Lee, HeungJu Ahn, KyungBae Park, SangChul Lee and Tan Yigitcanlar (Australia)
Abstract: What do we need for the sustainable artificial intelligence, which is not harmful, but beneficial human life?
This paper builds up the interaction model between direct and autonomous learning (IMBDAL) from the human’s cognitive learning process and firms’ open innovation process. It conceptually establishes a direct and autonomous learning interaction model. The key factor of this model is that the process to respond to entries from external environments through interactions between autonomous learning and direct learning as well as to rearrange internal knowledge is incessant. When autonomous learning happens, the units of knowledge determinations that arise from indirect learning are separated. They do induce, not only broad autonomous learning made through the horizontal combinations that surpass the combinations that occurred in direct learning, but also in-depth autonomous learning made through vertical combinations that appear so that new knowledge is added. The core of IMBDAL is the variability of the boundary between proven knowledge and hypothetical knowledge, limitations in knowledge accumulation, as well as complementarity and conflicts between direct and autonomous learning. Therefore, these should be considered when introducing IMBDAL into navigations, cleaning robots, search engines, etc. In addition, we should put into consideration the relation between direct learning and autonomous learning when building up open innovation strategies and policies.
Keywords: direct learning; autonomous learning; open innovation; closed innovation; sustainability

Title: Technological Characteristics, CEO’s Global Orientation, and International Performance of South Korean New Ventures
Authors: Junghyun Yoon 1,* and Jaehoon Rhee 2
Affiliations: 1 POSTECH, Korea; E-Mail: jyoon071121@postech.ac.kr; 2 Gyeongbuk Technopark, Korea; E-Mail: jrhee@ynu.ac.kr; * Author to whom correspondence should be addressed.
Abstract: International new ventures (INVs), that pursue rapid internationalisation, have received a growing amount of attention worldwide. Therefore, this study examined characteristics of INVs, and hence investigated empirically the relationships among of the technological characteristics of INVs, the characteristics of their chief executive officers (CEOs) (i.e., global orientation), and their international performance. The findings of this study can be summarised as follows: all of the technological characteristics (e.g., technological capacity, imitation, innovation, and standardisation) have significant effects on the international performance of INVs. Furthermore, the CEO’s global orientation mediated the relationship between the technological characteristics and international performance.
Keywords: global orientation; international performance; INVs; technological characteristics; internationalisation

Title: Patent-Strengthening Strategies by Industry Considering Market Size and R&BD Infrastructure in Korea
Authors: Bangrae Lee 1, Dong-kyu Won 2, Jun-Hwan Park 3, Leenam Kwon 4, Young-Ho Moon 5 and Han-joon Kim 6,*
Affiliations: 1 Senior Researcher, Korea Institute of Science and Technology Information, Republic of Korea; PhD student, University of Seoul, Republic of Korea; E-Mail: brlee@kisti.re.kr; 2 Principal Researcher, Korea Institute of Science and Technology Information, Republic of Korea; E-Mail: dkwon@kisti.re.kr; 3 Senior Researcher, Korea Institute of Science and Technology Information, Republic of Korea; E-Mail: parkjh@kisti.re.kr; 4 Principal Researcher, Korea Institute of Science and Technology Information, Republic of Korea; E-Mail: ynkwon@kisti.re.kr; 5 Vice President, Korea Institute of Science and Technology Information, Republic of Korea; E-Mail: yhmoon@kisti.re.kr; 6 Associate Professor, University of Seoul, Republic of Korea; E-Mail: khj@uos.ac.kr; * Author to whom correspondence should be addressed.
Abstract: The aim of this study is understand why there is a large difference in the number of patent application among the various industries in Korea. We wonder how many differences there are and also want to know which industry produces many patents. It is expected that one of the reasons for the difference is related with the market size by industry. From this point, we give attention to market size for the cause of the difference because patent activity is essentially related to technological commercialization and should accompany expense for the right (for example, maintenance fee). The second reason for the difference may be the R&BD infrastructure of each industry. Thus, it is needed to study the relation between the R&BD infrastructure such as research investment and the number of patent application. The other reason for the difference may be the characteristic of the industry or technology. For instance, it may be more difficult to achieve patent in the aerospace industry than the machinery one. In short, the difference in the number of patent application among industries in Korea is being studied in our research and the aim of this study is to develop some strategies to strengthen the patent application by industry. There is extant literature investigating such issues explanations for the decline of the patent-to-R&D ratio over the past three decades till the late 1980’s Kortum (1993) which include (i) the exhaustion of technological opportunities reduced the productivity of the research sector (Robert Evenson, 1991); (ii) “markets expansion raised the value of patents and competition in the research sector resulted in greater R&D expenditure per patent” (Kortum, 1992); (iii) “rising cost of dealing with the patent system led researchers to patent fewer of their inventions” (Zvi Griliches, 1990). Acemoglu and Linn (2003) developed a simple relation between innovation and potential market size. They argued that “a key determinant of innovation is the potential market size of users”. Czarnitzki and Toole (2011) studied the relation among patent protection, market uncertainty, and R&D investment. They found that “firm-level R&D investment falls in response to higher levels of uncertainty as perceived through revenue volatility”. They also found that “patent protection mitigates the influence of uncertainty on the firm’s R&D decision and leads to greater current R&D investment when patenting is an effective means to appropriate the returns to R&D investment”. This study is based on statistical data such as R&D investment, Korean market size, and the numbers of business, worker, researcher, research institution, and patent application by industry in Korea. Also, the comparison between the ratio of the number of patent application and that of the R&BD infrastructure by industry is performed. Data envelopment analysis (DEA) is used to to measure the productive efficiency of each industry. The study finds strong and weak industries in the aspect of productivity of patent application can be found by considering their R&BD infrastructure. In sequence, some strategies can be developed by industry to strengthen the patent application based on DEA. For example, the technological capability of some industries producing many patents and having low pure technical efficiency should be enhanced. The other industries showing the Increasing Returns to Scale (IRS) with the scale inducing the inefficiency of technique should increase their scale.
Keywords: patent-strengthening strategy; market size; patent application; DEA; R&BD infrastructure; innovation; R&D investment

Title: Diffusion Pattern of Convergence between High-technology Industries: Co-occurrence-based Analysis of News Article Data
Authors: Hyeokseong Lee 1, Namil Kim 2, Kiho Kwak 3,*, Wonjoon Kim 4,*, Hyungjoon Soh 5, Kyungbae Park 6
Affiliations: 1 Korea Advanced Institute of Science and Technology, College of Business, Graduate School of Innovation and Technology Management, Republic of Korea; E-Mail: leehyeoks@kaist.ac.kr; 2 Korea Advanced Institute of Science and Technology, College of Business, School of Business and Technology Management, Republic of Korea; E-Mail: namil.kim@kaist.ac.kr; 3 Korea Institute of Machinery and Materials, Department of Strategic Management, Republic of Korea; E-Mail: khkwak@kimm.re.kr; 4 Korea Advanced Institute of Science and Technology, College of Business, School of Business and Technology Management, Republic of Korea; E-Mail: wonjoon.kim@kaist.edu; 5 Korea Advanced Institute of Science and Technology, Department of Physics, Republic of Korea; E-Mail: schwarzxvi@kaist.ac.kr; 6 Sangji University, Department of Business Administration, Republic of Korea; E-Mail: kbpark@sangji.ac.kr; * Authors to whom correspondence should be addressed.
Abstract: Purpose/Research Question: Due to the reduction in technological and product life cycles which leads to rapid technological and market saturation in the high-technology industries, firms are pursuing to develop, acquire, and combine their scientific knowledge, technology, and markets to sustain their competitive advantages in the market. These activities eventually trigger the process of blurring boundaries between two or more distinct industries—that is, industry convergence. However, despite the substantial impact of industry convergence on the current economy, our understanding of this phenomenon is still limited. It is because that previous studies on industry convergence have taken supply-side approach that implies lacks of contemporaneity and actuality, while recent research from the perspective of market-side approach that overcomes the limitations of the supply-side approach has stayed only in descriptive trend analysis. Therefore, this research empirically measures the degree of convergence between high-technology industries and analyzes the diffusion patterns of the convergence by taking a market-side approach.
Key Literature Reviews: Benner, M.J.; Ranganathan, R. Divergent reactions to convergent strategies: Investor beliefs and analyst reactions during technological change. Organization Science 2013, 24, 378–394.
Chesbrough, H.W. Open innovation: The new imperative for creating and profiting from technology. Harvard Business School Press, Boston, 2003.
Choi, J.Y.; Jeong, S.; Kim, K. A study on diffusion pattern of technology convergence: Patent analysis for Korea. Sustainability 2015, 7, 11546–11569.
Curran, C.S.; Leker, J. Patent indicators for monitoring convergence—Examples from NFF and ICT. Technological Forecasting and Social Change 2011, 78, 256–273.
Curran, C.S.; Bröring, S.; Leker, J. Anticipating converging industries using publicly available data. Technological Forecasting and Social Change 2010, 77, 385–395.
Hacklin, F. Management of Convergence in Innovation: Strategies and Capabilities for Value Creation beyond Blurring Industry Boundaries: Contributions to Management Science; Springer: Berlin, Germany, 2008.
Hacklin, F.; Wallin, M.W. Convergence and interdisciplinarity in innovation management: a review, critique, and future directions. Service Industry Journal 2013, 33, 774–788.
Hacklin, F.; Marxt, C.; Fahrni, F. Coevolutionary cycles of convergence: An extrapolation from the ICT industry. Technological Forecasting and Social Change 2009, 76, 723–736.
Kim, N.; Lee, H.; Kim, W.; Lee, H.; Suh, J.H. Dynamic patterns of industry convergence: Evidence from a large amount of unstructured data. Research Policy 2015, 44, 1734–1748.
Mahajan, V.; Muller, E.; Bass, F.M. New product diffusion models in marketing: A review and directions for research. Journal of Marketing 1990, 54, 1–26.
Design/Methodology/Approach: We measure industry convergence degree based on the co-occurrence-based analysis of text mining for a large volume of unstructured data. To do so, we collect more than one million news articles that cover entire industrial sectors from 1987 to 2012. Then, we select the cases of evolutionary convergence between two high-technology industries where the degree of convergence increases over time, and apply those industry convergence degree to diffusion model for estimating potential size and growth rate of the convergence.
Findings/Results: We show that overall degree of convergence between high-technology industries have increased over time; further, we provide the degree of convergence between high-technology industries at the industry group level (i.e., 3-digit) of standard industrial classification (SIC). In addition, for each pair of two high-technology industries, our findings report various potential sizes and growth rates of industry convergence.
Research implications: These findings indicate that although transition to industry convergence is significantly under way in our economies, it is heterogeneously occurring which is consistent with the previous research. In addition, this research provides a method for firms and policy makers to anticipate the direction, potential size, and growth rate of industry convergence as well as to develop strategy and policy that sustain their competitiveness in the high-technology industries.
Keywords: co-occurrence-based analysis; diffusion model; high-technology industry convergence; industry convergence degree; news article data

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