Solution via a market connection

As we have seen, a shortfall in the diffusion of free innovations can result from a lack of a market connection between free innovators and free-riding adopters. Accordingly, a straightforward solution could be to create a market connection between them. For example, one might devise some very cheap and easy form of intellectual property protection to induce free innovators to protect and sell their designs instead of giving them away. In other words, one could try to induce free innovators to elect to become producer innovators.

There is no doubt that this approach could work to some extent. As we saw in chapter 2, about 10 percent of household sector innovators already fall into the category of "producers” and behave in ways that would reward investments in diffusion. However, I myself do not consider it a preferred approach. Addressing a failure in the free innovation paradigm by inducing more household sector innovators to become producer innovators will also decrease the individual and social advantages that we have seen that free innovation provides. For example, it might reduce the scale of free innovators' pioneering of new applications and markets.

 
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