The Relationship Between Open Innovation, Entrepreneurship,
8.3 Difference of Three Factors According to RISs and National Innovation Systems
8.3.2 The Difference Between Korean National Innovation System and Indonesia National Innovation System
Indonesia’s five IT enterprise CEOs are engineers. In this case, when CEOs try to develop new ideas by themselves, such as in enterprise B, the relationship between
Fig. 8.2 The differences between Daegu RIS and Seoul RIS (Source: Yun et al. (2013)) 8.3 Difference of Three Factors According to RISs and National Innovation Systems
entrepreneurship and open innovation is very low. But if CEOs try to let their engi- neers develop new ideas, such as in enterprises A, C, and E, the relationship between entrepreneurship and open innovation is higher. Enterprise C tries to invite and implement unusual ideas from outside the enterprise or from the gaming community.
The new ideas in most of the Indonesian IT SMEs under study were introduced by an engineer-CEO or by employees from an internal engineering department, except in enterprise C. This means that these Indonesia IT SMEs use a closed inno- vation strategy as directed by the engineer-CEO.
As shown in Fig. 8.3, some Indonesia IT enterprises (such as enterprises B and C) generate new ideas internally, while others (such as enterprises A and D) obtain new ideas or technology from university or engineering research laboratories.
Enterprises which belong to B, C, E, and H in Fig. 8.3 try to obtain new ideas open innovation. Most of the Indonesian IT enterprises that were interviewed have inter- nal or limited open innovation channels and activities.
As shown in Fig. 8.3, Indonesian IT enterprises had focused business models, except enterprise D, which enlarged its business model quantitatively, much like Korean enterprises B, C, E, and H. Enterprises A, C, and E enlarged their original business model to a limited degree.
Fig. 8.3 The differences between Korea National Innovation System and Indonesia National Innovation System (Source: Yun et al. (2013))
129
From this, we could conclude that any enterprise with closed innovation cannot enlarge its business model quantitatively or evolve its business model qualitatively.
But this does not exclude the possibility of closed innovation by the enterprise itself.
When comparing Indonesian IT SMEs to those of Korea, it is most of all appar- ent that the levels of relationship between entrepreneurship and open innovation, open innovation, and introduction of new business models are all lower in Indonesia.
The level of IT SMEs in Indonesia is low overall—except for some, like enterprise E, which has open innovation activities for the acquisition of new ideas and main- tains internal and external systems. Except for enterprise D, entrepreneurs them- selves showed little openness toward external ideas and little direct interest in building and maintaining an open system. Even considering that the IT enterprises of Indonesia are in their initial stages, the new business model aspect of these enter- prises is insufficiently activated, with a few exceptions. It is concluded that the new business model aspect remains at the stage of a supply-oriented limited product business model in Indonesia’s IT sector (Fig. 8.3).
However, the IT SMEs of Indonesia are basically promoting a closed innovation strategy centered on technical innovations. They are expanding technology through research collaboration with universities or research centers and other outside enter- prises within a limited range. Because the IT sector has not yet fully developed or matured, it is concluded that the enterprises in Indonesia have not reached the stage of creative open innovation that is based on demand, expectations, and ideas from customers.
All five enterprises in Indonesia were founded by engineers—unlike in Korea, where many IT SMEs do not have engineers as founders or CEOs. Even if this was not the case, by securing senior executives from the management or marketing sec- tors, the Korean enterprises tend to promote a market-oriented open innovation strategy and management. Engineer-oriented Indonesian enterprises are promoting technology-push-based business management, which is also internally based on engineers. Therefore, their diverse market and external open innovation idea pro- curement and new business model introduction still seem somewhat insufficient.
Unlike in Indonesian IT SMEs, the level of open innovation in Korean IT SMEs is fairly high. In that situation, various levels of open innovation have become a source for procuring new business models. Above all, entrepreneurship that is open to new markets is considered to be very important to the expansion of open innova- tion. Therefore, Korean IT SMEs at their current stage are considered to be in a situ- ation where the frequent introduction of new business strategies determines an enterprise’s competitiveness by various channels, and ways of open innovation with more open entrepreneurship serve as their base.
Research Question
1. Select any firm, and look into the relation between open innovation and entrepreneurship.
2. Select any firm, and look into the relation between open innovation and business model.
8.3 Difference of Three Factors According to RISs and National Innovation Systems
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