Innovation used to be this; a man builds a well. he is rewarded because he doesnt have to walk 5 hours a day to get water from a stream (free rider), and society is thankful to have a well in the community, he is praised.
today if a man builds the metaphorical well, he privatises the water system and everyone dies of thirst.
innovation does not naturally need monetary incentive.
I agree with you when it comes to patents, but privatized water systems usually come before the wells are dug. If anybody can trespass on my land to get free water, I might not dig the well in the first place. Also, letting everybody die of thirst would probably be bad for business if that business was selling water or even if it wasn't.