Collective Intelligence: An Emerging World in Open Innovation

Abstract

Responding to the lack of empirical research on the effect of collective intelligence on open innovation in the fourth industrial revolution, we examined the relationship between collective intelligence and open innovation. Collective intelligence or crowd innovation not only produces creative ideas or inventions, but also moderates any firm to innovate inside-out, outside-in, or in a coupled manner. We asked the following research questions: Does collective intelligence (or crowd innovation) motivate open innovation? Is there any difference in the effect of collective intelligence on open innovation by industry? These research questions led to the following three hypotheses: (1) Collective intelligence increases the performance of a firm, (2) collective intelligence will moderate the effect of open innovation, and (3) differences exist between the automotive industry and the pharmaceutical industry in these two effects. To empirically examine these three hypotheses, we analyzed the registered patents of these two industries from 2000 to 2014 over a 15-year period. These automotive and pharmaceutical patents were registered in the B60 category and the A61K category of the Korea Patent office, respectively. Collective intelligence was measured by co-invention. We found differences in the effects of collective intelligence on open innovation between the two industries. In the automotive industry, collective intelligence not only directly increased the performance, but also indirectly moderated the open innovation effect. However, this was not the case for the pharmaceutical industry.