Basic Income with High Open Innovation Dynamics: the Way to the Entrepreneurial State

Journal of Open Innovation: Technology, Market, and Complexity Concept Paper Basic Income with High Open Innovation Dynamics: The Way to the Entrepreneurial State Jinhyo Joseph Yun 1,* , KyungBae Park 2 , Sung Duck Hahm 3 and Dongwook Kim 4 1 Department of Open Innovation, Open Innovation Academy of SOItmC, Convergence Research Center for Future Automotive Technology of DGIST, Daegu 42988, Korea 2 Department of Business Administration, Sangji University, 83 Sangjidae-gil, Wonju, Gangwon-do 26339, Korea 3 Korean Institute for Presidential Studies (KIPS), Seoul 06306, Korea 4 Graduate School of Public Administration, Seoul National University, Seoul 08826, Korea * Correspondence: [email protected] Received: 21 May 2019; Accepted: 25 June 2019; Published: 11 July 2019 Abstract: Currently, the world economy is approaching a near-zero growth rate. Governments should move from a market-failure-oriented to a system-failure-oriented approach to understanding this problem, and transform to an entrepreneurial state to motivate the Schumpeterian dynamics of open innovation. We want to answer the following research question in this study: “How can a government enact policies to conquer the growth limits imposed on the economy by inequality or the control of big businesses?” First, we conducted a literature review to establish the concept of building a causal loop model of basic income with open innovation dynamics. Second, we built a causal loop model which includes basic income and all factors of open innovation dynamics. Third, we proved our causal loop model through a meta-analysis of global cases of basic income. Our research indicates that reflective basic income with permissionless open innovation, capital fluidity, a sharing economy, and a platform tax can motivate open innovation dynamics and arrive at a method by which an entrepreneurial state can conquer the growth limits of capitalism. Keywords: basic income; open innovation dynamics; permissionless open innovation; capital fluidity; sharing economy 1. Introduction 1.1. Growth Limits of Capitalism At the present moment, the global economy is approaching a near-zero growth rate. What are the problems which trigger the growth limits of capitalism? First, we cannot escape the high unemployment rate of most industrialized OECD countries, in addition to the increasing unemployment rate of China, India, Brazil, and other large under-developed countries. As shown in Figure1, youth unemployment is dramatically increasing, and the future of employment and jobs are susceptible to computerization due to the arrival of the 2nd machine age [1,2]. J. Open Innov. Technol. Mark. Complex. 2019, 5, 41; doi:10.3390/joitmc5030041 www.mdpi.com/journal/joitmc J. Open Innov. Technol. Mark. Complex. 2019, 5, 41 2 of 17 J. Open Innov. Technol. Mark. Complex. 2019, 5, x FOR PEER REVIEW 2 of 16 Figure 1. YouthYouth unemployment rate trend. Second, highhigh inequality inequality between between the the rich rich and and the poor,the poor, which which is continuously is continuously increasing, increasing, is another is growthanother limitgrowth of capitalism, limit of capitalism, because the because decrease the in decrease consumption in consumption by the major by poor the class major will poor diminish class thewill e diminishffective demand the effective in the marketdemand [3 in]. Thus,the market the price [3].of Thus, inequality the price is the of decreaseinequality of is the the global decrease growth of ratethe global [4]. The growth wealthiest rate [4]. one The percent wealthiest of individuals one percent globally of individuals decreased fromglobally 388 decreased members infrom 2010 388 to justmembers 62 in 2015;in 2010 therefore, to just 62 the in very 2015; richest therefore, became the even very richer richest relative became to even others ri whocher wererelative also, to byothers any sensiblewho were standard, also, by veryany sensible rich [5,6 ].standard, very rich [5,6]. Inequality isis notnot justjust between between individuals individuals but but also also between between nations. nations. Industrialized Industrialized countries, countries, by “kickingby “kicking away away the ladder”, the ladder”, pursued pursued historical historic developmental development strategies ofstrategi bad Samaritans,es of bad continuouslySamaritans, threateningcontinuously the threatening developing the world developing [7,8]. For world developing [7,8]. For states, developing policy developmentstates, policyand development obtaining organizationaland obtaining andorganizational human resources and human are becoming resources hot ar issuese becoming after their hot issues ladders after to economic their ladders growth to wereeconomic “kicked growth away” were by industrialized“kicked away” countries by industrialized [9]. In the casecountries of Korea, [9]. theIn Chaebolthe case system,of Korea, which the governsChaebol firmssystem, with which minority governs stock firms holdings, with minority has been stock exaggerating holdings, the has inequality been exaggerating in the Korean the economyinequality and in the motivating Korean economy market failure and motivating [10,11]. market failure [10,11]. The economyeconomy can can grow grow when when its dynamicits dynamic cycling cycling is maintained is maintained [12]. Dynamic [12]. Dynamic capitalism, capitalism, which is fromwhich Schumpeter’s is from Schumpeter’s new combination new combination or creative or destruction creative destruction theory, conflicts theory, with conflicts general with equilibrium general economicsequilibrium [13 economics,14]. In the [13,14]. same context, In the same Mark, contex Keynes,t, Mark, and Minsky Keynes, also and paid Minsky attention also to paid the instabilityattention ofto the capitalistinstability growth of the capitalist process and growth the role process of government and the role [15 of,16 government]. [15,16]. Macro economieseconomies such such as as national national innovation innovation systems systems (NISs), (NISs), regional regional innovation innovation systems systems (RISs), or(RISs), sectorial or sectorial innovation innovation systems syst (SISs),ems consist (SISs), conceptually consist conceptually of the cyclical of the dynamics cyclical dynamics of three factors: of three 1) openfactors: market 1) open innovation market byinnovation small ormedium by small enterprises or medium (SMEs) enterprises or start-ups; (SMEs) 2) closedor start-ups; open innovation 2) closed byopen large innovation businesses; by andlarge 3) businesses; open social and innovation 3) open [social17,18]. innovation These Schumpeterian [17,18]. These dynamics Schumpeterian of open innovation,dynamics of or open entrepreneurial innovation, cyclical or entrepreneurial dynamics, mature cyclical with dynamics, the growth mature of closed with open the innovation,growth of andclosed the open domination innovation, of these and dynamicsthe domination by large of thes corporations,e dynamics as by shown large incorporations, Figure2. The as dominant shown in controllingFigure 2. The power dominant of big businesscontrolling at the power mature of stagebig business can completely at the controlmature openstage social can innovation,completely orcontrol open open market social innovation, innovation, and or lead open to market a decrease inno invation, the growth and lead rate to ofa decrease any NIS ifin thethe governmentgrowth rate doesof any not NIS control if the the government dominant powerdoes not of bigcontrol business—for the dominant example, power by of not bi penalizingg business—for or charging example, big businessby not penalizing for high internalor charging reserves big business [18]. For for example, high internal Apple, reserves the world’s [18]. richestFor example, company Apple, and the dominantworld’s richest power company in the smart and phonethe dominant sector, went power from in value the smart creation phone to value sector, extraction went from by buying value backcreation shares, to alongvalue withextraction several by other buying methods back for maximizingshares, along shareholder with several value other [5,19 ].methods for maximizing shareholder value [5,19]. J. Open Innov. Technol. Mark. Complex. 2019, 5, 41 3 of 17 J. Open Innov. Technol. Mark. Complex. 2019, 5, x FOR PEER REVIEW 3 of 16 FigureFigure 2. 2. LifeLife cycle cycle of of dynamics dynamics of of open open innovation innovation.. Source; Source; modified modified from from [17], [17], Figure Figure 6). 6). GovernmentsGovernments should movemove fromfrom market market failure failure treatment treatment through through system system failure failure treatment, treatment, and andto an to entrepreneurial an entrepreneurial state state to motivate to motivate the entrepreneurial the entrepreneurial dynamics dynamics of open of innovation open innovation [20]. Most [20]. of Mostall, in of the all, era in of the the era “end of ofthe work”—that “end of work”—that is, the decline is, the of thedecline global of laborthe global force andlabor the force dawn and of the the dawnpost-market of the post-market era—the role era—the of the entrepreneurial role of the entrep statereneurial is becoming state more is becoming important more [21 ].important In addition, [21]. at Inthe addition, appearance at the of the appearance sharing economy, of the sharing the benefits economy, of existing the benefits firms and of the existing dominant firms state and of the big dominantbusiness are state deterring of big business the dynamics are deterring

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