There's quite a bit of money, a license for a small design shop will easily span from mid six figures to millions. There is rampant theft though, see the recent http://norcalrecord.com/stories/511081584-synopsis-claims-ub... as an example

The real reason innovation died is a complex and meandering sadness, but basically the business leaders prioritized head count and comfort over whatever it takes to lure creative, intelligent, academic, etc people into an industry and do non-linear things. I think there are similar parallels to computer architecture and operating systems, but these are a bit more widely approachable so there's still a small influx of academics and new companies.