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]. 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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]. 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