Add impact rewards as a complementary alternative to patents as innovation incentives

What is it about?

A free world is one in which human beings can live free, self-directed lives. A great obstacle to such a world is severe poverty, still blighting the lives of half of humankind. We have the resources, technologies, and administrative capacities to eradicate severe poverty, but doing so requires some restructuring of existing social arrangements. We might begin with the current regime governing innovation, which has monopoly markups as its key funding source. Such monopoly rents encourage the quest for innovations, but also greatly impede their diffusion. This headwind harms the poor, who cannot afford monopoly prices and whose specific needs innovators thus tend to ignore. It also works against potential innovations whose benefits would mostly go to third parties whom buyers care little about. Both problems can be much alleviated through a supplementary alternative reward mechanism that would enable innovators to exchange their monopoly privileges on any patentable technology for impact rewards based on the social benefits achieved with it. By promoting innovations and their diffusion together, international impact funds would bring substantial gains in justice and cost-effectiveness, especially in the pharmaceutical and green-technology sectors.

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Photo by Sikwe Scarter on Unsplash

Photo by Sikwe Scarter on Unsplash

Why is it important?

Uptake of many very useful innovations is impeded by high patent-protected monopoly markups. This is especially regrettable where uptake would be socially beneficial (vaccines, green technologies). Of course we much incentivize innovations! But impact rewards are often superior to patents in this role.

Perspectives