I think that undervalues the innovation that goes into taking a new technology and turning it into a widely available, affordable product. That is not easy, and without that step, no invention is going to change the world very much.

I also think it undervalues the role of the market in creating the capital to fund these activities, and the many different companies and universities (many private) who compete to spend that money in innovative ways.

By comparison, the Soviet Union centrally funded their core research too, but were not able to keep up technologically with market economies like the U.S. or western Europe.

I'm not really disagreeing with you, at least in the sense that I do agree that market economies create wealth and wealth is a necessary pre-requisite for funding research. What I think I'm getting at is that I disagree with the common trope that market competition creates fundamental innovation. I think market competition makes companies slaves to the bottom line, fighting tooth and nail in the dirt just to survive. To the extent that the market creates innovation, it does so in companies well-insulated from market competition (monopolies, oligopolies, etc). The decline of Hewlett Packard is a great example. When they became just another hardware company, competing on price in printers, PC's, etc, they ceased to be innovative.

Interesting reading: http://www.slate.com/articles/technology/technology/features.... You should really buy a copy of Tim Wu's book to appreciate Vail's line of thought.

> Over time I become more and more convinced that the market doesn't produce (much) real innovation.

This is something I've researched a bit in the past. It ends up being a case of semantics. The market produces plenty of innovation but not much basic research; whether it encourages invention is ambiguous.

These three terms (innovation, invention, discovery) are well-defined in the academic literature; typically innovation is the only act of progress that can be monetized. Innovation occurs both on a technical level (hey, this transistor doo-hickey can be put in microchips!) and procedural (hey, organizing in an assembly line increases the speed with which we can make model T's!). Invention is creating something new from known principles, innovation is applying an invention, and discovery is finding previously unknown principles.