Also, the military (for the most part) pays for these inventions, the actual research and manufacture is usually still done in the private sector. That doesn't have to be the case, but if we take the Soviet Union as an example of an alternate system (Basically state-owned design Bureaus) they could just about keep up with the pace of technological development (and match in limited scope) but their populaces didn't see the "trickle down" technology.
Instead of state we have state based capitalism. Instead of innovation by state, we have private firms which can steal from other countries freely as they are not military. And they can produce well as well. And they can go out to sell you things and selective let you in for helping in the copying.
That is Soviet Union 2.0 - china.
Pity this was kept secret and only ever saw military use. Sounds like a very advanced processor.