2.1. Studies Concerning Invention
Generally, the academic-based inventions involving knowledge workers, scholars and research scientists are considered high-risk, but these inventions can serve as the basis for new technologies, and their applications may even pave the way for entirely new industries [
45,
46]. Consequently, the general definition for invention states that, “invention is a process in which a person manipulates both a device-like conception (mental model) and a set of physical artifacts (mechanical representations) in order to create a new object” [
5]. Moreover, it is defined as “a psychical super-activity combined with professional competence and refined by social motivation” [
37].
Fundamentally, according to Griliches [
31] the commercialization of new idea by an inventor depends on the tradeoff between cost and future income. This fact is also endorsed by Goniadis and Varsakelis [
47] who highlighted that in a small economy like Greece’s financial restraint is one of the most significant external factor in entrepreneurial development. Financial restraint, coupled with the source of knowledge, the perceptions about market opportunities and past business experience, restrict the inventor’s decision to start a new venture. So, access to “risk finance” is the main factor that hinders the policy of any organization or country to invest in new risk driven investments usually termed as enhanced entrepreneurial activity. Most of the funding agencies like US Aid, the World Bank and the European Union have recognized this fact and consider financing of risk ventures to be the basis of increases in entrepreneurial ventures.
Carlson and Gorman [
5] linked invention with both cognitive and social dimensions and emphasized the fact that intellectual as well as social forces inform the inventor and shape his mind to invent new products. According to authors “invention is a process in which a person manipulates both a device-like conception (mental model) and a set of physical artifacts (mechanical representations) in order to create a new object”. The example of the invention of the kinetoscope by Edison is an excellent example which had explained this phenomenon in real world. Hence, if an informed and intellectually motivated learned (conceptually cleared) scholar works simultaneously on the development of mental model as well as the physical mechanical framework of a new idea than a new product of value can be invented.
Weber, Dixon and Llorente [
18] presented a “hand tool” as the means to enter the domain of creativity and invention. Authors mention that hand tools are simple inventions like hammers, nuts and bolts, etc., and considered these simple machines the basic building blocks of more complex machines and procedures that these simple tools generate or create. Mechanical inventions were mentioned as results of the ‘joining factor’ of these tools.
Lyman [
17] emphasized the knowledge creation capacities of the knowledge workers in a society. According to the author, the year 2020 will offer knowledge workers the archives of historical data and documentary records relating organizations, machines, nature, the history of science, allied fields and identity. Therefore, the author claimed invention as the mother of necessity.
Fox [
30] discussed a do-it-yourself paradigm which altogether changed the way products were manufactured. Under this paradigm “low financial and professional barriers to entry enable ordinary individuals to invent, produce and sell goods”. So, all the invention and production mechanisms need web-based selling activity that enables inventions to reach people across the globe. The do-it-yourself invention could revolutionize the manufacturing sector of any country and if adapted and installed with proper planning, could generate wealth for the country. Thus, under this paradigm new do-it-yourself products could be invented, produced and sold to new buyers in newly created markets worldwide.
Johnson & Brown [
34] considered factors of technological infrastructure including cumulative research funding, increases in the number of institutions of higher education, or increases in the number of scientists and engineers as the driving force that had the power to bring about an economic revolution in the country. According to authors these were the primary factors which inverted the traditional patterns of inventions in the northwest and southwest countries. So, emphasis on geographical concentration and shifts in policy frameworks based on extensive planning energized American scientists to regain an almost lost position of patent dominance in the world.
Sutthiphisal [
16] examined the association between geographical location of invention and production during the era of the second industrial revolution (1870–1910). Authors empirically analyzed the technologically emerging electrical equipment and supplies industry as well as the textile and shoes industry. They reported no association of invention and production locations and argued that due to differences in the industrial production patterns, the variables had no direct association. Technically, highly skilled manpower with relevant technological knowledge had produced larger quantities of technologically driven inventions in the 18th century. In the nineteenth-century the concentration of technically knowledgeable persons devised the rule for cutting edge technology and due to this undeniable fact, Japan, Sweden and Germany dominated in technology-based cutting-edge inventions.
Lettice, Roth & Forstenlechner [
35] focused on New Product Development Process and developed knowledge-based performance measurement system. They used measurement cube methodology and argued that “invention without exploitation does not lead to successful new product”. Here, exploitation means, effective exploitation of technically developed new product and use of vibrant commercialization strategies to sustain the long-term existence of the product in the market. This argument is true from the knowledge perspective which further extends into reuse of knowledge as well as creation of new knowledge as integral parts of the knowledge value chain. So, creation of new knowledge assets is possible by means of the invention process, portfolio, organization and tools.
Pana [
37] emphasized the synthesis of intellectual thinking and invention. Invention is itself a complex system which has the following definition: “it is a psychical super-activity combined with professional competence and refined by social motivation”. The ‘intellectual invention’ is a resultant of renewal of the prevailing cultural system in our societies and the renewal cultural system is based on intellectics and inventics which are established fields of study. Moreover, intellectics, technics and inventics are integral parts of a system that works in harmony to generate intellectual inventions. It is done by managing information intellectually by using expert IT systems in an artificial intelligent environment to foster invention culture.
Harmon [
33] argued that invention of new technologies is possible if education of current and past technologies is inculcated to a new generation who is capable of creating and inventing new technologies. These new technology inventors are the intellectual capital of an organization. Moreover, if these newly invented technologies are further refined and modified, they become the intellectual assets of the organization called intellectual property rights or patents. So, the Science-Technology-Innovation (STI) process developed by Harmon is backed by an existing knowledge base in the organization and factors like commitment, motivation, leadership and learning capacity of the inventor/knowledge worker.
Nerkar and Shane [
36] argued that the commercialization of technological invention is directly and significantly linked with the scope and pioneering nature of the invention and also has a U-shaped relationship with the age of the invention. So, if a firm has invented a technologically driven product, then its pioneered availability to the target market can create competitive advantage and the firm gets benefits in terms of higher profitability.
Lach and Schankerman [
10] undertook research in the USA to examine at what level cash-flows from university inventions affects the licensing revenues generated by universities. In the USA, the royalty income is shared between inventor and university based on set intellectual property policies and royalty sharing schedules. Lach and Schankerman developed a model representing the expected license revenue per faculty, which was determined by revenue earned by invention, commercial value of the invention, the quality effects on the value of the invention and the stochastic shock of model, and it is licensed by the Technology Licensing Office of the university. Lach and Schankerman found that private universities in the USA had generated license income greater than public sector universities. Additionally, strong loyalty incentives were provided by United States universities to their faculty scientists that resulted into greater license income for the inventors. Hence, support in terms of motivation which had originated from encouragement, cash and equipment, facilitated United States faculty scientists to work diligently to produce more intellectually driven inventions that had generated greater license income for the universities.
Clark [
20] opened discussion by providing the example of the Massachusetts Institute of Technology (MIT) as a hive of invention, where a specific course on invention is taught to technology interested students. Similarly, a course on invention was designed by Clark at the University of Glamorgan in Wales, UK to teach students of enterprise and business how to invent. The course was focused on developing effective entrepreneurs who have practical business skills and attitudes suited to creating new commercially viable products. Clark further argued that students’ ability to imagine and create new categorizations in the mind is necessary step that leads to the stage of critical evaluation of existing ideas or patents. The newly designed course on invention was introduced to the students in the first year of business class and in class alertness exercises and, further-on, creativity was promoted among students. These in-class activities were enhanced and inventive gaps were considered opportunities. The inventive approaches were devised to expedite neural activities fostering invention and more effective entrepreneurial activities were actually generated which resulted in winning two patents: one in UK and other international.
Filho, Tahim, Serafim and Moraes [
9] conducted research by considering individual (independent) inventors in Brazil and Peru. The triple helix which comprises government, private firms and universities has been identified as the invention and innovation process which plays a significant role in bringing out individuals’ inventions into the marketplace. The individual inventors have been identified as the major contributors towards the increase in patents filed in Brazil and Peru. Filho et al. have claimed that not much research had been done on individual inventors who were always recognized better than corporate inventors because they enjoy freedom of thought and action due to creativity and persistence. The individual inventors have been identified as the drivers of exponential growth in intellectual property rights which foster technological innovation and ultimately the economic development of Brazil and Peru was enhanced. Furthermore, innovations done based on inventions need to be strengthened by introducing innovation policies and a better environment must be created to protect the individual inventors in Brazil and Peru.
An interesting study by Gross, Hanna, Gambhir, Heptonstall and Speirs [
32] shed light on the time scale required to transform invention into innovation in the energy sector. Gross et al. considered commercialization of the low carbon technologies which could play a role in the reduction of carbon emissions in the backdrop of the devastation of climate change. According to Gross et al. the process of making energy supply as well as end-use new technologies available to masses takes 20 to 70 years to be widely and properly deployed. The invention to innovation process defined by Gross et al. starts from research and after finding market opportunities for the commercialization of the new low carbon emission energy technology become widespread in the market. The innovation timeline illustrated in the study explains that new technology move through three phases until commercialized in a specified market. These three phases are; development, market formation and growth & diffusion. Initially in the development phase invention of new idea relating technological solution to an existing problem is completed, which go through the processes of designing, testing, application and improvement. Additionally, during this phase, knowledge is generated relating invention of new technology by means of evaluation, screening and research. Right after this process, the phase of market formation starts, which includes a market formation phase which encompasses research, development and demonstration of newly created technology as a prototype or pilot, also known as the pre-innovation cycle. The accepted performance of the new technology during the prototyping is further tested in a selective market setting normally considered a niche for further enhancement and exploitation of the new technology. In the last phase of the innovation, new technology is then spread throughout the market. The growth phase may further lead to obsolescence of the new technology or may be replaced by a new technology in the marketplace.
Albers, Heimicke, Walter, Basedow, ReiB, Heitger, Ott and Bursac [
29] introduced Agile Systems Design for Product Generation Engineering processes. In the absence of holistic understanding of the relevant factors, it is extreme difficult for a product or service to be successful in the marketplace. Therefore, according to Albers et al., product profile definition and explanation during the early stages of product development had been identified as an important process. More emphasis was on the innovation because once invention had been recognized as a satisfactory means of meeting the market demand and successfully penetrated the market it became ready to be transformed into innovation. Albers et al. highlighted Product Generation Engineering (PGE) as the transformation mechanism that bridges the transition of invention into innovation. In this process, Agile Systems Design (ASD) consisted of continuous interaction of operation, objectives and objects systems which work based on available situation and existing need in the market. This ASD as a holistic part of innovation process, as according to Albers et al., consists of multiple phases of product engineering including; analyze, identifying potential, conception, specification, realization and release of the product. Therefore, in this context, product profile had been defined by Albers et al. as, “A product profile is a model of a number of benefits that makes the intended provider, customer and user benefits accessible for validation and explicitly specifies the solution space for the design of a product generation”. Thus, Albers et al. established that once an invention had been technically proved as demand-driven output, the product profiles then amplify an innovation after the successful launch in the marketplace.
Ozel and Penin [
22] in their work validated university-generated knowledge as a substantial resource for industrial innovation and economic growth. In the last three decades the university-based patents had been increased and licenses delivered to firms had revolutionized the technology transfer channel from universities to industries. The research carried-out relied on the original data relating 91 inventions contained in 62 intellectual property licenses issued to two French universities during the period 2005 to 2014. Ozel and Penin reported that there is no relationship between characteristics of invention and degree of exclusivity either in the cases of generic and embryonic inventions. Furthermore, Ozel and Penin highlighted the significant role of university and industry technology transfer modalities in the case of licensed inventions that could result in superior performance.
Caviggioli, Marco, Montobbio and Ughetto [
27] discussed monetization of patents granted to the top 58 universities in the United States as intellectual assets which had been initiated as a federally funded research projects. The technology monetization activities had gained momentum in the academic institutions of America and due to the creation of Institution’s Technology Transfer Offices, in 2016, 7021 technology patents had been won by US universities. The research output in the form of a patent by the research centers of the US universities had been monetized by using multiple mechanisms identified by Caviggioli et al. as “market-mediated channels”. These mechanisms or monetization processes included licensing agreements, technology transfers, mergers and acquisitions, partnerships agreements, spinoffs and outright sales. It had been reported that 29.7 percent of inventions that had ‘patents’ registered by the universities in the United States during the study period 2002 to 2010 had been licensed out to be commercialized for regular markets. Caviggioli et al. considered patent value, technical merit, legal robustness, technological complexity and science basicness as the main characteristics of the universities’ which had been employed to generated patents during the transaction process in the marketplace. It had been reported that the legally protected patents with technical merit were mostly regarded by the acquirers of new technology in the US market.
2.2. Studies Concerning Open Innovation
Reed, Storrud-Barners and Jessup [
40] explored the affects’ of open innovation arising from competitive advantage on firm’s profitability which is directly linked with controlled intellectual property rights. Authors argued that monopoly and Ricardian rents are the driving forces behind open innovation, which means outsourcing innovation that could be firm controlled, third-party controlled and community controlled. Authors mentioned reputation, employee knowhow, culture, networks and databases as drivers of Ricardian rents. So, Ricardian rents basically arise from owning scarce and valuable resources. Authors signified the importance of community-controlled open innovation because it drives competitive advantage for the firm. Hence, invention leads to innovation and this phenomenon is beneficial for the firm if open innovation is accepted as the source of long-term survival and sustainability of the new product, technology or service in the marketplace.
Lopez and Esteves [
24] conducted case study research and analyzed intertwined networks of knowledge acquisition in one of the leading Spanish banks (BBVA). In the comprehensive and extended analyses Lopez and Esteves found that the important components of organizational innovation are internal and external networks along with reorganization of classical structures according to the laid-out rules, processes, procedures and strategies. Therefore, Lopez and Esteves argued that the configuration of external networks requires a good-oriented strategy of knowledge acquisition which guides an organization in identification of possible knowledge requirements and tools necessary to acquire the knowledge. This acquisition process is workable when the decision making process is fast enough to meet the challenges of knowledge acquisition. So, internal networks deal with these challenges and require support from top management that must be available to the people who create innovative solutions to new challenges. Hence, internal and external networks are identified by Lopez and Esteves as “the enablers of knowledge acquisition and appropriation which would be used to promote innovation within the organization”.
Al-Belushi, Stead, Gray and Burgess [
4] explained that the concept of open innovation was first introduced by Chesbrough [
6,
7,
8] in his book which defined the transition from a closed to open innovation model for Research and Development firms. The open innovation is defined by him as, “the use of both inflow and outflow of knowledge to improve internal innovation and expand the markets for external exploitation of innovation”. The widespread nature of the concept of open innovation rests on the phenomenon of globalization which encourages collaboration among innovation value chains. Therefore, in this context the inbound innovation dimensions are breadth and depth in the number and diversity of firm network collaborations. Al-Belushi, Stead, Gray and Burgess developed and tested a new measure of inbound open innovation of marine bio-industry sector of Oman and reported that open innovation index is a valuable tool to assign scores and rank firms that engaged in open innovation activities.
Sutopo, Astuti and Suryandari [
41] highlighted an important aspect of new technology commercialization and measurement efficiency of university research-based technologies marketed by the technology transfer offices. Besides the main objectives of the universities to achieve higher performance in the domains of teaching and education, research and development and public service, new dimension demanding commitment from universities includes; commercialization of research output, autonomy status enhancement and economic development. Therefore, according to Sutopo, Astuti and Suryandari universities need to take concrete measures to improve quality and competitiveness of their technology products which could sustain the transition from technology development to technology commercialization processes. The goals of the technology transfer office need to be defined and measured based on factors which employ policies which foster higher efficiency frontier value. In this context, the commercialization of technology products could be improved if, according to Sutopo, Astuti and Suryandari, the universities ensure significant improvements in marketing assistance strategies, business network expansion, universities internal regulations and strategies, physical facilities and mentoring and couching activities.
Yun, Won and Park [
12] argued that in twenty-first century capitalism, firms operating around the globe need to create a medium balance between Market Open Innovation, Closed Open Innovation and Social Open Innovation as a subset economies of Entrepreneurial Cyclical Dynamics of open innovation. These factors had been transformed to formulate a model known as the “system dynamics model” which was further simulated by Yun, Won and Park to identify the U shaped link between subset economies. The Entrepreneurial Cyclical Dynamic model was discussed by considering the economic conditions of South Korea, India and Japan in the context of conglomerates operating in these economies. It was further recommended that firms need to maintain or move to a point in the economic growth where there is a medium balance between sub-economies of the Entrepreneurial Cyclical Dynamics model of open innovation.
Sivam, Dieguez, Ferrira and Silva [
28] conducted research to identify factors that significantly contribute towards open innovation in an organization. Sivam et al. collected responses from 25 researchers who were engaged in innovation related activities in a research intensive scientific and technological development institute in Portugal. According to Sivam, Dieguez, Ferrira and Silva the definition of innovation provided in the OECD Manual [
48] has been, “An innovation is a new or improved product or process (or combination thereof) that differs significantly from the unit’s previous products or processes and that has been made available to potential users (product) or brought into use by the unit (process)”. Furthermore, in this context, open innovation is explained as an integrated set of activities that could not function in isolation and therefore is the result of a complex co-creation process that involves knowledge flows through entire social and economic environments which opens the innovation processes to all the participants actively involved in it. Thus, the definition of open innovation brought forward in the study of Chesbrough [
6,
8] is, ‘‘A paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology”. This definition involves utilization of internal and external resources available to an organization which relay knowledge management strategies as well as take into account the human side of creative thinking and idea generation mechanisms. Accordingly, it has been argued that innovation is not a linear path, rather it is a dynamic process generated as a result of scientific, technical, business, market research and design efforts. Moreover, Sivam, Dieguez, Ferrira and Silva identified culture, leadership and strategy as the drivers of the open innovation arena and called them conditions that drive innovative dynamics in the form of adaptability, agility and that initiate change in an innovation driven research organization.
Aschehoug, Lodgaard and Schulte [
38] discussed the critical nature of maintaining competitive advantage in the marketplace based on the ability and capacity of the companies to bring innovative solutions in the form of shorter life cycle products. These are the inter-company as well as intra-company processes and activities including knowledge management, team formulation, managerial activities, employee motivation and collaboration among the networks. The inbound open innovation technique has been identified as the most widely used process by Norwegian manufacturing companies. Thus, according to Aschehoug, Lodgaard and Schulte, open innovation strategies, along with careful integration of human and managerial aspects, could result in a successful launch of open innovation projects by the companies. This fact is also supported by the study of Hyvarinen Keskinen and Levanen [
23] which endorsed knowledge-based innovation management under uncertain and resource constrained environments to maintain competitive advantage in the marketplace.
Yun and Liu [
11] had introduced micro and macro dynamic factors and associated them with the Quadruple-helix model. The main factors relating to micro dynamics include open innovation, evolutionary change and a complex adaptive system. However, the main factors relating to macro dynamics include closed open innovation, social open innovation and market open innovation. These micro and macro dynamic factors had been considered as the dynamic factors essential for a firm to gain sustainable growth and prosperity in the fourth industrial revolution. Moreover, a shared economy perspective had been advocated by Yun and Liu which rests on the idea of collaboration among economic stakeholders including government, society, industry and university. Thus, a more comprehensive framework relating sustainable development of economy, society and environment in the context of open innovation had been discussed in the study.
Yun, Zhao, Jung and Yigitcanlar [
13] discussed the importance of culture as the major facilitator of innovation in an organization. The main question answered in the study was related to the significance of culture for open innovation dynamics and a model representing “Intrapreneurship leading Culture” was introduced to explain the interaction between three different dimensions of entrepreneurship including entrepreneurship of the novice entrepreneur, intrapreneurship of the employee of an existing organization and organizational entrepreneurship of the firm; these are also called sub-types of entrepreneurship. Therefore, in this study, Yun, Zhao, Jung and Yigitcanlar defined a cultural mechanism required to practically implement open innovation dynamics. The requisite culture, along with its prerequisites, had been suggested as suitable for implementation in an industrial firm as well as in a public sector organization.
Zhu, Xiao, Dong and Gu [
44] explained the effectiveness of open innovation in terms of a business model and new product development speed. New Product Development had been considered central for the survival of the firm in the fast-changing global business arena. The conceptual model developed by Zhu, Xiao, Dong and Gu had taken into account two open innovation strategies: the horizontal strategy, called open innovation breadth, and the vertical strategy, named open innovation depth. Furthermore, business model fits had been included as moderating variables for the interrelationship between open innovation and new product development speed. The empirical results of the study had established that both open innovation strategies had positively impacted the new product development speed. Moreover, Zhu, Xiao, Dong and Gu also explained that different types of business models, including efficient as well as novel, should be aligned with the open innovation breadth and depth. In this context, the efficient business model had been identified as the best model fit with open innovation depth, however open innovation depth is best suited for the novel business model.
Vicente-Saez, Gustafsson and Brande [
42] opened debate on the new frontiers of the open exploration era the world is currently experiencing, relating new principles and practices of open science and innovation. The open data sharing, open access publishing and participatory designing is fostering the concept of open science and innovation which supports the notion of transparent as well as accessible knowledge that could be shared and developed in a collaborative setting around the globe. Therefore, Vicente-Saez, Gustafsson and Brande discussed the recent developments in policies and practices undertaken by the research teams at universities to adopt as well as adapt new digital technological transformations to revolutionize traditional closed innovation methodologies. Inbound and outbound innovations have been identified as two novel types of open innovation which have been utilized by universities as the mechanism used to harness results from open innovation in a digitalization era. Thus, according to Vicente-Saez, Gustafsson and Brande, openness in innovation is remodeled by the universities based-on new principles, including transparency, accessibility, authorization and participation by using open repositories, open physical labs, a transdisciplinary platform, open source software and digital technologies. Therefore, open innovation has accelerated the learning, creation of new knowledge and research frontiers to find a solution to societal issues and nurture the growth of entrepreneurs.
Yan and Huang [
19] conducted a study on the unbeatable success of Huawei based on successful implementation of open innovation policies and strategies in the last three decades. Huawei had developed 5G technology and owned 37 percent of patents relating 5G technology of telecommunication equipment manufacturing. It has been explained that the long-term commitment to invest in Research and Development (R&D) activities are the primary reason for Huawei’s success in the global telecommunication sector. Additionally, Huawei expanded its R&D based on an open innovation policy and collaboration with university scholars. Huawei Innovation Research Program (HIRP) developed an open eco-system that encouraged academia and industry linkages and simultaneously enabled co-creation among people, organizations and sectors of the society. The open innovation mechanism, according to Yan and Huang, must support a successful business model which includes value creation and value capture. Huawei became the world technology leader because it invested 14 percent of its sales revenue in R&D activities every year during the last 26 years of its existence. Huawei created the Science and Technology Fund in 1999 to fund top Chinese universities to work on industry related projects. Huawei designed and developed strategic plans to forecast future technological development trends, customer demands and linked R&D issues and thus flagship research projects had been funded and relevant research partner universities were selected. Thus, Huawei adopted a systematic approach and successfully employed open innovation while collaborating with academic partner universities in China.
Erol and Klug [
39] discussed the benefits of open innovation in Austria by introducing the concept of a regional open innovation learning lab. This concept rests on the notion that sustainable innovativeness for a firm is possible if open innovation is adopted to share ideas with reliable external parties that could maximize productivity. Erol and Klug had identified two leading factors, which are organizational culture and the practical learning of open innovation. Moreover, educational institutions had been identified as key stakeholders, enablers and partners of innovation systems designed to foster co-innovation in the industrial regions in Austria. Open innovation according to Erol and Klug is a complex endeavor which has been recognized as a key factor for sustainable economic growth and prosperity. The practical significance of these types of arrangements could be a close coordination among SMEs and universities to get benefits from each other in the areas of ideas, expertise and knowledge. Moreover, Erol and Klug, based on interview sessions with 26 managers of industrial companies, had identified academic sphere, policy sphere, citizen sphere and business sphere as the integral components of an open innovation learning lab established in the University of Austria. This learning lab had been considered a learning environment for education institutions which embrace industry 4.0 in such a way that under a roof all the essential infrastructure is available which facilitate learning, ideation, making and meeting for the stakeholders to practice open innovation in an industrial region.