| > What does that have to do with it? The design licensing entity is going to get a fee per-plane from every company doing final assembly. They're going to set the fee high enough to cover their costs but not so high that people go to a different design from another company instead. It means that there's no incentive to be a "design licensing entity" that takes on all the cost and risk of designing, prototyping certifying an airframe and then shares the returns on making that airframe with a bunch of competitors that take on no such risk. Either the royalties are set very high in which case you're creating massive chaos for no meaningful price reduction, or you've made new aircraft development in the United States commercially unviable and accidentally given Airbus a global monopoly on 150+ seat airliners... > How about an actually competitive market, because anyone can get the design on the same terms and can't use an exclusive right to foreclose competition in parts of the supply chain other than the one which is supposed to be under patent. It's the illusion of market competition because the only way a company licenses IP it spends billion dollars a year updating and testing so that other manufacturers can undercut it on sales is if the government steps in and sets the price and decides who should and shouldn't be licensed 787 integrators (otherwise the answers are "too high for anyone to get involved" and "no, you guys that didn't coinvest in its development can't have licenses to sell anything more valuable than PMA parts"). And in practice not only do you get the government determining who is allowed to build 787s at what price, but also needing to underwrite the development costs, since "invest several billion in complex technology innovation; government will then determine the royalties you are entitled to earn from it" is not really an attractive proposition > As opposed to the monopolist whose customers can't even switch to a competitor when the supplier has a safety scandal, yet operates under the same profit incentive to cut costs? Yes, monopolists care more about maintaining the reputation of technology they've spent billions designing than random new market entrants established to manufacture others' IP more cheaply than them. Funnily enough subcontractors with little stake in the 737 specifically and the resulting diffusion of responsibility was the cause of the emergency door defects, and they're not going to do anything to solve MCAS either... |