Most of the tech industry in fact came out of that government funded research. I bet half of the people working for In-Q-Tel [1][2] and similar gov VC funded companies don't even understand that relationship. I should add that even if a company is not listed, it does not mean some of the VC funding did not come from one of the gov VC's.
The Roman empire created roads, but we don't attribute railroads and cars to them. I think "government spending invented the internet," is the "you like roads, dontcha?" of our time. ARPA wasn't open ended research either, it was to respond to the existential threat of nuclear annihilation. Conflating public largess with national defence spending is a category error. Not to belabour it, but I do think this trope needs to be put to bed.
How should government fund basic vs. moonshot research? Incentives. If they think they are smart enough to allocate funds via a committee, they need to be smart enough to figure out how to structure incentives.
> How should government fund basic vs. moonshot research? Incentives. If they think they are smart enough to allocate funds via a committee, they need to be smart enough to figure out how to structure incentives.
I can't find the reference right now, but fairly recently there was a report on the declining ROI of NSF (or possibly NIH) research grants, in that the bias toward proposals that seem likely to produce results was foreclosing high risk high reward proposals, while the funded proposals don't actually fulfill the expectations of the selection committee (in part because what was really being selected for was the ability to write a convincing proposal).
Committees just aren't all that good at their job of picking research proposals (or researchers) that are likely to produce results that advance our knowledge.
Several proposed remedies were examined, but the one that seemed best able to overcome the issue was reserving a tranche of funding for proposals randomly selected from a pool (said pool only excluding the very worst proposals that don't meet basic eligibility requirements).
Finance was very immature industry at that time. There wasn't a lot of money in private investment funds and the investment vehicles to capitalize on this research didn't yet exist. Today's private market would likely seize on an opportunity like the internet. There is appetite for long term focus in today's investors. Just look at PE (price-earnings) ratios of today's stocks, and the frothy revenue multiples in valuations over the last ten years.
