Open innovation domestic and international and startup market trends

 

Open Innovation

Open innovation is a concept first proposed by Professor Henry Chesbrough of the University of Berkeley, USA, and refers to the use of external resources to develop technologies and ideas necessary for corporate innovation [1] ].

From the perspective of R&D, open innovation has the advantage of reducing the overall R&D burden and maximizing performance by utilizing external technologies while concentrating its R&D capabilities on the company's areas, rather than simply outsourcing [2]. In the early 2000s, when open innovation appeared, open innovation-focused only on R&D, but since the mid-2000s, it has expanded to all areas such as production and service [3]. Recently, as digitalization progresses and the openness of information and technology expands with the advent of new technologies such as blockchain and big data, various stakeholders can participate, and open innovation is becoming more important [4]. In this context, this report intends to examine the current state of open innovation in Korea and propose improvements based on the current situation abroad.

2. Status of domestic open innovation and start-up market

Recently, many companies in Korea are also introducing open innovation. In particular, open innovation in the pharmaceutical and bio industries and artificial intelligence-related fields, which require the development of new technologies, stands out.

2.1. Open innovation in the pharmaceutical and bio-industry

To reduce the risk of new drug development and maximize efficiency, many pharmaceutical and biotech industries are using open innovation. A representative example is Yuan Corporation, which has been investing in promising bio venture companies since 2012 to secure new drug candidates and sell them to the global market. For example, in November 2018, it signed a 1.4 trillion won technology contract transfer with Janssen Biotech, Inc. In case of case, it was a substance purchased by bio venture Oscotech for 1.5 billion won in July 2015, and after receiving the material and patent rights, Yuan spent about 7.5 billion won in clinical trials [5]. In addition to Yuan, many pharmaceutical and biotech companies such as Hanmi Pharm, Daewoong Pharm, LG Chem, and Theragen Etex are promoting new drug development through open innovation.

2.2. Open innovation in artificial intelligence-related fields

Another field in which open innovation is being actively promoted is the artificial intelligence (AI)-related industry. AI-related technology is developing rapidly and has a high potential for use across various fields, so open innovation that combines the strengths of each company to create a new market is being actively carried out. For example, in November 2018, LG CNS signed an MOU with Lunit, a medical artificial intelligence startup, for business cooperation in the public health AI field [6]. Lunit is a startup that has the technology to diagnose lung disease by analyzing X-ray images within 15 seconds. It is expected that there will be

On the other hand, not only the utilization of already developed technologies but also open innovation for the development of original technologies are being actively carried out. In August 2018, LG Electronics opened the 'Toronto AI Lab' in Toronto, Canada, and secured source technology for artificial intelligence through cooperation with the University of Toronto Artificial Intelligence Research Center, and cooperated with local artificial intelligence startups. and to strengthen investment [7]. Hyundai Motor Company also invested in Israeli startups such as Obsys, Autotox, and Pitango to develop parts necessary for autonomous vehicles. In November 2018, Hyundai Cradle Tel Aviv (TLV), an open innovation center in Israel ' to secure future core technologies in the field of artificial intelligence, and to discover and nurture local startups [8, 9].

As above, although open innovation is currently being promoted mainly by large companies, the participation of various stakeholders such as various governments, research institutes, and companies is insufficient. Therefore, in the next chapter, we will look at the overseas open innovation trends in which various stakeholders are participating.

3. Overseas Open Innovation Trends
3.1. United

States The United States was the first country to apply open innovation, and open innovation centered on large corporations is being actively carried out. A representative example is P&G's Connect+Develop program, through which many products we know, such as Oral-B electric toothbrush, Pantene shampoo, Febreze air freshener, and Pringles, were developed [10]. In this report, besides open innovation centered on such large corporations, this report intends to examine open innovation being promoted by other actors as the center.

3.1.1. Open innovation specialist

Some companies operate open innovation on their own, such as P&G and GE, but open

3.1.2. Open innovation led by research institutes and government agencies

Open innovation in the US is not limited to corporations. Many government agencies and research institutes want to receive the necessary technology through open innovation, which leads to the establishment of new companies such as start-ups. Representatively, the National Aeronautics and Space Administration (NASA) is contesting the technology required for space development through the Centennial challenge [12]. From 2007 to 2009, The Astronaut Glove Challenge was held to improve the design of the glove used in space to increase efficiency and durability. Participants met all the conditions required by NASA, escaped the chamber in space-like conditions, and tested the glove's performance in emergency situations, such as when the globe explodes. The resulting globe was not only used by real NASA but also allowed participants to start new startups. 2007 winner Peter Homer founded Flagsuit LLC., an astronaut glove company, based on his skills and prize money, and delivered it to NASA. 2009 winners Ted Southern and Nikolai Moshi Nikolay Moiseev also founded Final Frontier Design, a startup company that manufactures spacesuits based on the winning money [13]. Currently, NASA is competing for technology to build a residence on Mars using a 3D printer through the Centennial Challenge program.

Not only NASA but also many government agencies and research institutes are openly offering technology and ideas through open innovation. NASA and the US Department of Homeland Security Science & Technology Directorate are offering a $300,000 prize for the Hidden Signals Challenge, which seeks to use existing data to identify signals related to biological threats. Hidden Signals Challenge), and the US Department of Education also developed an 'EdSim Challenge' to find ways to use virtual reality technology in education, and new technologies to help education. 'Ed Prizes' and 'CTE Makeover Challenge (CTE Makeover Challenge)' were held to design a maker space for students. Open innovation centered on these governments and research institutes can find creative technologies and ideas necessary for institutions, and participants can start new startups through prize money, etc., and it is also an opportunity for existing startups to grow.

3.2 Japan

The Open Innovation White Paper released in 2018 by the Japan Open Innovation Venture Creation Council (JOIC) and the New Energy Industry and Technology Development Organization (NEDO) is a Japanese open innovation subject, including national and local governments, large corporations, small and medium-sized enterprises (SMEs), and universities and public institutions. As a research institution, each role is summarized in Figure 1 [14]. Among them, notable is the activity of startups that started from universities, and this report intends to summarize them.

3.2.1. Open Innovation Centered on Universities According to the

Japanese Open Innovation White Paper, joint research with private companies at universities is increasing, and the number of patents applied by universities is also increasing [14]. Next, university-graduated startups based on university research are also increasing. As of 2017, a total of 2,093 companies are pursuing business, and about 45% of them are making a profit [14].

A typical example of a university graduate is the electric vehicle startup GLM. GLM was based on the EV development project of the Kyoto University Venture Business Research Institute. Following the development and release of a small sports electric vehicle in 2017, GLM is developing an electric vehicle platform that can respond to autonomous driving [15]. Another example is PeptiDream, a bio venture company based on the research results of the University of Tokyo. did Peptiderim has entered into partnerships with large pharmaceutical companies in Japan and overseas to promote joint research on new drug development, and the company resolves the stage of making new drug candidates, but after that, clinical trials and production are outsourced to large companies [16].

The Japanese government is currently actively encouraging startups based on Japanese universities. As part of the resolution in January 2013, in 2012, 100 billion yen was invested in four universities: Tokyo University, Kyoto University, Osaka University, and Tohoku University. To commercialize the R&D achievements of universities by creating the [17].

Recently, Japanese universities are establishing open innovation bases within universities in cooperation with companies. In April 2018, Osaka Institute of Technology opened 'X Port', a base for open innovation, together with the Osaka Chamber of Commerce and Industry. 'Cross Pod' will be used as a base for large corporations, SMEs, startups, the general public, and students to gather and support task solving, new business creation, and matching through open innovation [18]. Tokyo Medical and Dental University also signed an agreement for the 'TMDU Open Innovation System' in 2018 jointly with Hitachi Manufacturing Co., Ltd., and plans to promote R&D and business in the medical and health fields, focusing on support for the diagnosis of incurable diseases, and human resource development. The goal is to develop technologies for early detection of incurable diseases, such as clinics where there are no specialists, by using the knowledge related to incurable diseases accumulated by Tokyo Medical and Dental University and Hitachi's AI and medical device technology [19]. As part of open innovation, Tokyo University of Agricultural Science and Technology started industry-university joint research within the university in May 2018 with The Nisshin OilliO Group. This joint study aims to elucidate the relationship between medium-chain fatty acids and intestinal immunomodulatory function by elucidating the mechanism of energy and fat metabolism by ingestion of medium-chain fatty acids based on the intestinal environment [20].

 4. Conclusion

This trend report examines domestic and foreign open innovation and startup trends with a focus on cases. Open innovation is essential to meet new emerging technologies and rapidly changing technology demands. As we saw in the introduction of the report, Korea has recently been actively introducing open innovation in the bio and pharmaceutical industries and artificial intelligence-related fields, and economic results are also being achieved. However, the promotion of open innovation centered on the government, local governments, research institutes, and universities other than companies is insufficient. In this context, the current status of overseas open innovation, especially the cases of the United States and Japan, has significant implications. As discussed in this trend report, in the United States, companies specializing in open innovation services that connect consumers and suppliers of open innovation have emerged and are active. On the other hand, in Japan, open innovation and startups based on universities stood out. Although not covered in detail in the report, open innovation centered on local governments is also being actively carried out. Recently, changes are taking place in Korea as well, with the Ministry of SMEs and Startups and local governments cooperating to promote open innovation, and universities such as POSTECH are actively supporting open innovation [18, 19]. Based on this report, it is expected that open innovation involving various stakeholders will be activated in the future.

Innovation through companies specializing in open innovation that relays companies that need technology (consumers) and companies that have the technology (suppliers) are also increasing. A typical example is Nine Sigma. When global companies such as Nike, P&G, Cisco, and Olympus request the necessary technology to Nine Sigma, Nine Sigma helps to supply the technology by contacting SMEs, startups, and research institutes of universities around the world around the network. For example, at the request of Pepsi-Cola to meet consumer demand for better nutrition and reduced salt intake while preserving taste, a Swiss research institute found and brokered the technology [11]. In addition to Nine Sigma, companies such as Innocentive, YourEncore, and Yet2 are functioning as open innovation specialists that connect consumers and suppliers.