Procurement and innovation working together in development of driverless cars

Another example how public procurement (connected) innovation can lead to the development of significant new areas of business, this time for the development of driverless cars:

There was federal money at the inception of the self-driving vehicle, the same government largesse lurking in the origin stories of the internet, global-positioning system technology and alternative energy. Darpa has pursued the same mission since the Sputnik era: Make key investments in breakthrough technologies to promote national security.

The autonomous-vehicle challenges were designed to bring out into the world technology that had been under development for decades in labs. There was military urgency at the time. The U.S. was fighting wars in Afghanistan and Iraq, and scores of soldiers were being killed by roadside bombs. Driverless vehicles could save lives on the front lines.

An initial competition, the Darpa Grand Challenge of 2004, asked robotic cars to travel roughly 140 miles across the Mojave Desert. Carnegie Mellon’s entrant, a Hummer named “Sandstorm,” managed to travel the farthest—a whopping seven miles. At a follow-up event, in 2005, Stanford University came in first place, and Carnegie Mellon’s contenders placed second and third. Each university team included dozens of students and professors, as well as corporate sponsors.

I said public procurement connected and not procurement derived (or demand led) innovation because there is no more than a fleeting relationship between these two since the programme was sponsored by the Pentagon's DARPA which aims to develop new military technologies. This shows that perhaps those two do not really need to be connected as it is implied by approaches such as the innovation partnership and that the market likes these type of competitions as pump priming exercises.

That idea, however, does no good to address the shortcomings put forward by Mariana Mazzucato on the Entrepreneurial State. But what is the counterfactual here? Would participants have taken part if it implied some sort of IP licensing arrangement or a stake in the business (assuming one existed at the time)? Would a state intervention of such type deterred participation in the first place?

Food for thought.