The question is: what kind of valuable things would still be produced? You'll still get iPhones, but will you get ARM cores or Snapdragon chipsets or LTE or MPEG4 or pills that cure Hep-C?
The bigger picture is that almost all hard R&D takes place under the umbrella of some sort of protection from copying. Intel spends billions a year on semiconductor R&D, and protects it with trade secrets. Pharma companies spend billions on drug R&D and protect them with patents. Even internet companies like Google and Facebook depend on being able to hide a lot of their "secret sauce" (either algorithms or compilations of user information) on the server-side where it can't be easily copied.
Hard R&D that isn't protected from copying is usually subsidized. The core internet protocols were subsidized by the Government. Advances in core browser protocols are subsidized by Internet companies that rely heavily on ad revenue. Going back further in history, Bell Labs was subsidized by AT&T's telephone monopoly and PARC was subsidized by Xerox's copier monopoly. That model can work too, but has its own problems.
The bigger picture is that almost all hard R&D takes place under the umbrella of some sort of protection from copying. Intel spends billions a year on semiconductor R&D, and protects it with trade secrets. Pharma companies spend billions on drug R&D and protect them with patents. Even internet companies like Google and Facebook depend on being able to hide a lot of their "secret sauce" (either algorithms or compilations of user information) on the server-side where it can't be easily copied.
Hard R&D that isn't protected from copying is usually subsidized. The core internet protocols were subsidized by the Government. Advances in core browser protocols are subsidized by Internet companies that rely heavily on ad revenue. Going back further in history, Bell Labs was subsidized by AT&T's telephone monopoly and PARC was subsidized by Xerox's copier monopoly. That model can work too, but has its own problems.