Final answer:
HSBC Commercial Banking focused on open innovation activities to overcome the private sector's typical underinvestment in innovation, driven by the potential copying of inventions and positive externalities. Open innovation enhances their competitive edge and potential for higher profits.
Step-by-step explanation:
HSBC Commercial Banking likely spent so much time on open innovation activities because the private sector often underinvests in innovation due to the risk of new inventions being easily copied and the presence of positive externalities, or spillovers, that benefit firms other than the innovator. In the competitive market, innovation allows a firm to gain a temporary edge over competitors and earn above-normal profits, as highlighted by Gregory Lee, CEO of Samsung, who emphasized their "relentless pursuit of new innovation" as a core business principle. However, to fully capitalize on the social benefit of an invention and outweigh the cost of investment in research and development, it's crucial for innovators to receive a more significant share of the broader social benefits.