Optimal Dynamics of Functionality Development in Open Innovation

Sustainable functionality development has become crucial option for firm's survival in a new paradigm confronting a post-information society. This can be realized by earlier emergence of functionality development. In this context, effective utilization of external innovation resources leads to follower substitution for leader in open innovation. This substitution induces advancements of innovative goods by substituting gratification of their consumption for resistance to them. Thus, optimization of utmost gratification of consumption under certain investment would be crucial for firm strategy. Optimal functionality development dynamics is analyzed in this paper by integrating production, diffusion and consumption functions, and using Pontryagin maximum principle. The result demonstrates that ***supra-functionality can be developed through gratification of consumption substitution for resistance to new innovation.