How 'open innovation' can promote sustainable economic growth and development

In recent years, intensifying geopolitical factors have severely impacted businesses around the world. According to the latest research by the United Nations Conference on Trade and Development, the compound annual growth rate of direct foreign investment in manufacturing was -12% in the three years following the COVID-19 outbreak. Meanwhile, the global economic growth rate for 2024 is projected to be only 2.6%, barely above the recession threshold of 2.5%. Clearly, the global economy is in a slump.

Over the past several decades, the world has basked in the warm glow of free trade, with rapid economic growth and widespread prosperity. However, slowing globalization has disrupted this economic boom, exacerbating regional development imbalances. Businesses face unprecedented challenges as they enter the broader market, including grappling with supply chain security and rising costs.

Despite these challenges, I firmly believe globalization is the way forward. Since entering the Vietnamese market in 1999, which marked our first overseas market, TCL has established manufacturing bases and industry chains in many other markets as well, including Southeast Asia, South Asia, Europe, North America, and South America. The company’s products and services are now available in more than 160 countries worldwide.

Over the past 25 years of globalization, we have come to understand the true meaning of open innovation. To us, open innovation means the global convergence of technology, capital, talent, production support, and distribution. By fostering internal and external collaboration and extending innovation networks across borders, shared success can be achieved.

Countries and businesses should follow economic trends and smart practices to create a global trade system that benefits everyone. They should support open innovation and help ensure balanced economic growth worldwide.

Open innovation is a development path proven in practice for promoting enterprise globalization and achieving shared success for countries, companies, and industries.

Open innovation has brought greater commercial value to companies in developed economies like Europe and the US through groundbreaking technology. Many companies that have succeeded in China possess leading technologies and rely on China's efficient industrial chain and skilled industrial workers. These factors are essential for achieving large-scale production. China's large market makes consumers confident they can succeed.

The global success of companies like Toshiba and Samsung follows a similar pattern. They have key technologies, use global resources, meet market needs, continually improve, create jobs, and boost local economies.

Open innovation has enabled technological advancements and industrial chain upgrades for enterprises in developing countries. Chinese companies have strengths in production, manufacturing, and research. By utilizing their resources and markets, they are creating a global network. They access advanced technology and information by working with leading research institutions, universities, and businesses worldwide.

In the process of globalization, they also drive the export of essential components, materials, and equipment to enhance the innovation capacity across the domestic industrial chain. Such open innovation not only promotes the development of core technologies but also objectively enhances the innovation capabilities of the entire global industrial chain.

Open innovation has allowed developing economies to achieve more balanced development. A new World Bank report has found that the income gap between the most vulnerable 75 countries and the wealthiest economies is widening for the first time this century despite their enormous potential to increase global prosperity. TCL's products and services are available in many of these countries. We observed that the slowdown in globalization has increasingly marginalized smaller developing economies, causing significant declines in direct foreign investment in manufacturing and severely hindering their ability to upgrade their production with newer technologies.

To keep up, developing countries need policies that support open innovation. They should also boost their ability to innovate for fast economic growth and social progress. For example, the Vietnamese government has made starting foreign businesses easier, lowering entry barriers and encouraging local companies to work with foreign ones in research and development. These policies have quickly improved Vietnam's innovation, attracted foreign investment, and significantly boosted technological capabilities, leading to strong economic growth.

Global talent mobility and the exchange of knowledge are indispensable factors in open innovation. Our business experience has taught us that the open innovation model encourages talent to cross borders for dialogue and cooperation, cultivating talent pools with international vision and an innovative mindset. This helps enterprises create products and services that precisely meet global market demands, elevating their competitiveness.

This not only promotes technological progress in individual countries but also drives regional technological advancements and boosts the local economy. For instance, India has recently encouraged its students and academics to study abroad. At the same time, it has attracted overseas talent to return and start businesses, injecting strong momentum into India's economy.

Globalization can drive economic growth by supporting trade, investment, talent mobility, and technological innovation. The total GDP, per capita GDP, and the amount of direct foreign investment are reliable indicators of economic health. Data shows that from 1992 to 2022, total global GDP increased from approximately $25 trillion to $101 trillion, per capita GDP rose from $4,659 to $12,647, and net direct foreign investment outflows grew from $186.36 billion to $1.74 trillion. These data points concretely prove that economic globalization benefits all countries.

However, global free trade over the past 30 years has encountered unprecedented pushback. Nobel laureate economist Christopher Pissarides pointed out that openness and globalization are important forces driving economic growth and social progress. We must overcome current difficulties, continue promoting global openness and cooperation, and leverage new technological tools to deepen international cooperation, addressing challenges that affect all of humanity together.

Speaking as an entrepreneur, I would like to call on global policy-makers and entrepreneurs to address current challenges through open innovation. We should collectively promote global economic growth and the balanced development of all countries.