I think that if we got rid of those incentives people would still innovate
So few steps to go here then; many (by far most) inventors do not have that little detail so they rely on their invention being monetized to give them that. People in open source or charity often just have enough money/time to do that on the side, but most people do not.
Needs basic income or working communism; both do not exist (yet or ever) so how would that work?
I think the solution is potentially a mix of automation providing cheap resources to everyone and government funding for useful research.
Yes, but then they'd keep their innovations secret as trade secrets or they would only innovate when it was cheap and unrisky.