The Current State of Open Innovation in Korea and Policy Recommendations for Its Advancement

The Future of Open Innovation in Korea: Current Status and Policy Directions

Hello, I’m **Dr. Jin. Today, I would like to introduce my latest report, [“The Current State of Open Innovation in Korea and Policy Recommendations for Its Advancement,”](https://www.kita.net/researchTrade/report/tradeFocus/tradeFocusDetail.do;JSESSIONID_KITA=97BDA8EA05E7D660F102701CF201EB47.Hyper?no=2707) published by the [Korea International Trade Association(KITA)](https://kita.org/). Released in February 2025**, this report provides an in-depth analysis of Korea’s open innovation landscape over the past five years, categorizing key types, case studies, and policy implications.

Over the past few years, the number of open innovation programs and participating corporations has grown exponentially. However, with the venture market contracting and investment volumes declining, the need for a sustainable growth strategy has become more pressing than ever. This article explores the collaboration process between large enterprises and startups, insights from industry practitioners, and policy directions for the future.

Why Open Innovation Matters

Open innovation is not just a collaborative model — it is a strategic imperative for both startups and large corporations:

• For startups, it provides the momentum needed for global expansion and access to critical resources.
• For large corporations, it accelerates the creation of new business models and innovation, reinforcing their competitiveness.
• For the national economy, it enhances trade structure innovation, diversifying export markets and key industries.

By combining startup-driven innovation with corporate resources and infrastructure, new globally competitive products emerge. This collaboration not only enhances export competitiveness in existing industries but also creates new export drivers, ultimately strengthening Korea’s trade-driven economy.

Below is a visual representation of how open innovation fosters industry growth and export diversification.

< Significance of growth of startups and large corporations through open innovation >

Challenges in a Shifting Market

Despite its potential, open innovation is currently facing headwinds. The global venture market downturn since 2022 has led to a decline in investment and corporate participation in open innovation initiatives. The numbers reflect a clear slowdown, and the overall market sentiment remains cautious. Unfortunately, this trend is unlikely to reverse in the short term.

Recognizing these challenges, our study provides a comprehensive assessment of Korea’s open innovation ecosystem over the past five years, using real-world data and case studies. The report also offers practical recommendations for both policymakers and corporate leaders to foster sustainable innovation in the years ahead.

We hope this research will spark meaningful discussions on policy measures to revitalize open innovation, ensuring that Korea remains at the forefront of global innovation and trade competitiveness.

Let’s keep the conversation going — what are your thoughts on the future of open innovation?

The Rise and Challenges of Open Innovation in Korea

Since 2016, driven by the rapid acceleration of the Fourth Industrial Revolution and digital transformation, Korea’s startup ecosystem has entered a new phase of innovative growth through open innovation. However, despite its increasing importance, there are no official statistics on open innovation in Korea. To address this gap, I compiled all publicly available projects through extensive research across online sources.

The numbers speak for themselves. In 2018, there were just seven open innovation programs with 18 large corporations participating. By 2023, these figures surged to 87 programs and 361 participating large enterprises, marking a dramatic rise in corporate-startup collaboration.

“Has it really grown that much?”

Yes, and the transformation has been striking.

In 2018, open innovation initiatives were nearly non-existent, apart from a handful of projects led by Creative Economy Innovation Centers by Korean Ministry of SMEs. At the time, most Korean large enterprises hesitated to openly engage in such collaborations.

If you’re skeptical, I encourage you to review the data yourself. For consistency, I have excluded activities that merely involve consulting entrepreneurs or one-off corporate sponsorship, as these do not constitute true open innovation. Instead, my analysis focuses on key activities such as:

✔ One-on-one startup discovery meetups ✔ Proof of Concept (PoC) collaborations ✔ Corporate in-house accelerators ✔ Strategic venture investments

These activities began gaining traction in 2018 and have since expanded rapidly across Korea. Open innovation activities are carried out in various ways, including mentoring and acceleration, joint R&D, business cooperation, and strategic investment, centering on PoC.

In its early days, open innovation was primarily concentrated in the manufacturing sector, particularly in bio, materials, parts, and equipment (SMEs). However, in recent years, it has expanded significantly into the service industry, including: 🔹 Platforms, 🔹 Fintech, 🔹 Healthcare, etc.

This diversification reflects the evolving needs of global markets and the growing recognition of open innovation as a critical strategy for corporate growth.

Challenges Ahead: The Impact of the Global Venture Slowdown

However, the 2022 global venture capital downturn has cast a shadow over this growth. Since then:

🔻 Investment in open innovation has dropped to nearly half its previous level. 🔻 Further declines in investment and activity are expected beyond 2025. 🔻 Major global corporations are reducing budgets allocated to open innovation.

A clear example of this trend can be seen in domestic Corporate Venture Capital (CVC) investment. As illustrated in the chart below, CVC investment surged until 2021, only to plummet in 2023 to less than half its previous level.

This shift signals a challenging period ahead, where maintaining momentum in open innovation will require strategic adaptation and new approaches to sustain corporate-startup collaboration.

I will continue to monitor and analyze these trends — stay tuned for deeper insights into how open innovation can weather economic shifts and continue driving innovation in Korea and beyond. 🚀

2. Differences in Perceptions Between Large Enterprises and Startups: Survey Analysis

To gain deeper insights into the perceptions of open innovation, the **KITA conducted a survey in October 2024 involving 234 large enterprises, innomediary organizations, and startups. The findings revealed notable differences between large companies and startups regarding the outlook for open innovation and their evaluation of collaboration efforts**.

① Outlook for Open Innovation in 2025

🔹 Large enterprises: 54.3% hold a conservative outlook, expecting “levels similar to this year.” 🔹 Startups: 52.5% are optimistic, anticipating “growth.”

📌 Implication: Large companies tend to cautiously assess market conditions before scaling open innovation initiatives, whereas startups remain optimistic, expecting continuous expansion.

② Key Factor in PoC (Proof of Concept) Success

🔹 Large enterprises: Strategic fit and alignment with corporate needs (Ranked 1st) 🔹 Startups: Superiority of their product/service (Ranked 1st)

📌 Implication: Large companies approach open innovation as a business opportunity aligned with their existing strategy, while startups prioritize the competitiveness of their technology and solutions. This disconnect can lead to differing expectations in collaboration.

③ Startup Competitiveness Evaluation

There is a significant gap in how large enterprises and startups evaluate startup competitiveness.

🔹 The largest discrepancy (4.93 vs. 6.58 points) was in “Readiness for Global Expansion.” 🔹 Large companies tend to underestimate startups’ global capabilities, whereas startups rate themselves more favorably.

📌 Implication: This perception gap suggests large enterprises may hesitate to engage in global partnerships with startups, while startups may overestimate their readiness for international markets.

④ Challenges in Open Innovation Collaboration

🔹 Large enterprises: “Lack of startups that meet their standards” (Ranked 1st) 🔹 Startups: “Lack of investment and budget from large enterprises” (Ranked 1st)

📌 Implication: Large enterprises often perceive startups as underprepared for collaboration, while startups struggle with limited investment and resources from corporate partners. This highlights a critical funding gap that must be addressed for sustainable open innovation.

⑤ Open Innovation Satisfaction Levels (5-Point Scale)

🔹 Startups: 4.51 points (Relatively high satisfaction) 🔹 Large enterprises: 3.58 points (Performance satisfaction: 3.25 / Collaboration experience: 4.00)

📌 Implication: While startups generally express satisfaction with open innovation collaborations, large enterprises expect stronger performance outcomes. This suggests that long-term strategic support is needed to bridge expectations and ensure mutual success.

Key Takeaways

✔ Aligning expectations: Large enterprises focus on strategic fit, while startups emphasize technological competitiveness. Finding common ground is essential. ✔ Bridging the investment gap: While large companies seek highly developed startups, startups require early-stage investment and long-term support. ✔ Improving long-term impact: Large enterprises may need more structured approaches to measure open innovation success beyond short-term ROI.

As the open innovation ecosystem in Korea matures, fostering mutual understanding between corporations and startups will be critical to unlocking greater innovation potential. 🚀

3. Analysis of Open Innovation Success Stories

An analysis of open innovation cases from the past five years reveals that large enterprises and startups have advanced through a step-by-step process of learning, collaboration, and growth, ultimately achieving groundbreaking innovation.

The volume of success stories is remarkable. When examining the overall landscape, several key successful factors emerge:

✔ Most success cases took approximately 2–3 years to materialize. ✔ The majority were the result of sustained collaboration between large enterprises and startups. ✔ On average, 7.2 attempts were made to organize a single Meetup before a meaningful partnership was formed.

Given the wealth of cases, we cannot explore them all. However, I will introduce and examine a few key examples through the lens of learning, collaboration, and growth to better understand the mechanisms behind successful open innovation at the next article.🚀