This study examines the effects of downsizing actions and implementation strategies on market performance. While downsizing actions reduce costs, they also produce a loss of valuable human capital that can exceed the benefits resulting from the lay-offs. In support of this argument, the results showed that downsizing had a negative effect on market returns and the effects grow increasingly negative with larger downsizing actions. However, the market reacts more positively to downsizing actions when reallocation strategies are used and to large downsizing actions when disengagement incentives are applied. The results of this research suggest the importance of carefully managing valuable resources to create positive returns.

With the advent of the Fourth Industrial Revolution, the Korean industrial environment has been rapidly changing. As a result, several industries are facing different innovation conditions, including: the automotive industry, which is a traditional manufacturing industry in Korea; the aerospace industry, which has been vertically integrated, and has been led by a single large company-Korea Aerospace Industries-since Korea went through an economic crisis in the 1990s; and the robotics industry, which is currently emerging. This study used parameters related to patents originating from the automobile, robotics, and aerospace fields. The patents subjected to analysis were those registered in Korea from 2001 to 2014, and included those that were applied for, jointly applied for, or registered by Korean companies. This study analyzed the differences caused by the effect of open innovation in the three industries. According to our results, first, the three industries experienced different effects of open innovation. Second, when large companies controlled a given industry, open innovation either worked a little or did not work at all. According to this research result, the Korean robotics industry, which has a weak dominance of large companies, experienced a strong effect of open innovation, in that joint patent applications led to economic gains from the patents and an increase in technology transfer and technology value. The aerospace industry of Korea, which has the highest dominance of large companies, experienced a slight effect of open innovation, as the effect of joint patent application only improved the technology value. Finally, the automotive industry of Korea had an intermediate level of open innovation, between the aerospace and robotics sectors.

Abstract:The way people innovate and create new ideas and bring them to the market is undergoing a fundamental change from closed innovation to open innovation. Why and how do firms perform open innovation? Firms' open innovation is measured through the levels of firms' joint patent applications. Next, we analyze network structures and characters of firms' joint patent applications such as betweenness and degree centrality, structure hole, and closure. From this research, we drew conclusions as follows. First, the structure of collaboration networks has both direct and indirect effects on firms' innovative performance. Second, in the process of joint patent applications, there is a long tail phenomenon in networks of joint patent applications. Third, the number of patents and International Patent Classification (IPC) subclasses together constitute a meaningful measure of the innovation performance of firms.

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We propose an international economic agenda to overcome the growth limits of capitalism that can be supported by the United Nations. Sustainable Environment based global goals should be added to sustainable economy. For this, we propose dynamic balance between three sub-economies such as open innovation, closed innovation, and social innovation sub-economy. For this, we propose to set up a UN community and a long range plan.

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