Market for innovation

I stumbled upon a very interesting concept today while researching something at work: www.fluidinnovation.com. I think this is an amazing idea: it is in reality the equivalent of a market for innovation, as any company that created any kind of improvement, innovation, process etc that is protected by a patent can sell it to other interested parties through this intermediary. It probably exists for a long time, and I am sure this is not the only company of its type, but I must admit I have never wondered how companies go about selling licenses of their patents and capture the associated profits. Seeing this it all dawned on me. Indeed, it is pretty straightforward for example for a software development company to produce and sell licenses for its software, because this is their core competency and their business model relies on marketing these licenses. Thus is makes sense to keep this process in house.

However, when a company like Boeing develops a new method for valuing investment projects using Real Options, it cannot really go about trying to market this innovation and sell it to other companies that might be interested. Why not? Because it is not their business. Their business is to make and sell airplanes, not investment decision software, and they would have no interest to allocate internal resources to diversify in that area. As a result, they would own a sleeping patent, one which could generate revenues but does not because a sustained, coordinated internal effort to market it would not make much economic sense given the company's business model.

Also, another benefit I see for this initiative is that it helps innovation to develop even more. New knowledge builds on the existing stock of knowledge, and a market for innovation only allows to broadcast the new discoveries to a wider public and especially to the interested parties. This should facilitate related innovations in these companies and create a synergy effect.