The Free Market Does Not Mean Innovation

by
Michael Bond
Founder, Sterling-Bond Escrow Services & Rumbler Cars

Twitter:  @mbprosperity

"All the social, economic and environmental problems facing the world today can be solved,
the problem is that the solutions are not politically-correct."

Michael Bond

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Article: 16th, August, 2013

Illustration: The Free Market Does Not Mean Innovation

Does the free market competitive nature of our economy nurture innovation, or does it repress innovation, progress and prosperity?


Over the summer I've been thinking of new ways to raise money for a couple of pet innovative projects. One idea I came up with was to offer British companies a little innovation, a small, cheap, simple product to help their sales; but I was deterred by one of the problems of the free market.

According to the idealists of the "free market" it's supposed to be the route to innovation and enterprise, but it has a flaw - theft. If you have a new innovation can you be sure it won't be stolen?

The competitive nature of the free market ideal and the endless financial/market pressures on costs and prices is always driving businesses to control costs in their battle for survival. One of those costs is innovation.

If a company can source innovation for free or steal it then their costs of production, paying for designers, innovators, etc., are reduced.

In these last few months I've come across two stories of innovators being cut out of their work either by the companies or the partners they were working with and these are not unusual cases. Such is "free market competition".

It's such stories that deter me from working on many innovations. Why develop or reveal anything if the risk of theft is high?   If I am deterred how many other innovators are struggling with the free market and how much innovation is being blocked? What are we loosing that could benefit the world?

If an innovator cannot trust to any outsider the answer is to either abandon it or do it yourself. That's another obstacle facing innovation - money.

Innovation needs money to research, to protect and to produce an idea. In an economy facing severe recession and austerity the availability of money or any other resources to turn an innovation into a product is very low.

All this many sound obvious, but if such problems aren't addressed then the free market ideal of stimulating innovation fails in the face of poverty of resources or greed of companies/partners.

There are solutions. Find ways to raise small amounts of money, protect your idea, refine it secretly, then develop it as far as you can before releasing it to your prospective clients. Each of these steps is an obstacle in innovation, hurdles that can deter many good ideas and it all hinges on money.

Without money there is no innovation into the free market.

I began this by telling you about my own innovation. The first plan was to approach several manufacturers and retailers with the idea, but the thought of theft deterred me. The innovation will not be released this year, it may never be released until it can be fully-developed, protected, tested and designed in several variants.

The free market allows anyone to enter and trade freely, but its competitive nature encourages others to steal ideas, and that deters innovation, progress and prosperity unless new solutions can be found to nurturing and protecting innovation and innovators.

END.

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In my second article I'll discuss another aspect of the free market's limitations to problems in the world and an alternative approach to stimulating new solutions: Avoid The Free Market, Avoid World Crises


 

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Background

The writer is a former finance specialist.

For the last few years he has focussed his attention on the development of an alternative economic strategy for the UK and world economy through the stimulus of new technology innovation, design and the arts.

In his estimation the true unappreciated economic potential of the UK is enough to solve all UK economic, social and environmental problems without additional increases in taxation or regulation.  This is the basis of the Commonwealth Prosperity Plan, a "Plan B" for Britain.

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[Key words, etc:  These pages are subject to frequent changes.  Subject matter relates to the economic strategies of the British government, with regard to the banking financial crisis, the ongoing austere recession and factors to revive the economy through such measures as quantitative easing, tax cuts, reduction in planning permissions and much more.  Benefits of the Prosperity Include large-scale employment solution to the national housing crisis, protection of the green belts and countryside against urbanisation.]

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Acknowledgments: Vulcan photography in Woodford section, courtesy of Tim Bell