Every company I've worked for has had some form of annual or bi-annual "hack week," where employees can form ad-hoc teams and work on something they think would be cool to exist. Sometimes it's a feature, sometimes it's a new product line, sometimes it's just something ridiculous (e.g. an eight foot wide NES controller).

Some of these projects did turn into shipped features, though I'm not sure I ever saw a new product line come out of it.

One of the places I worked had an internal incubator. An engineer or PM could pitch an idea, and get paid their salary to go work on it if accepted. That was still early stage when I left, so unclear if anything came of it.

The point though is that many companies do open avenues for engineers to innovate directly.