As I pondered this question at first I wanted to keep my old fashion belief of research first. Why change something that has shown some success. However, if we look at history we see that development driven programs have at times also worked. The space race to put a man on the moon was a prime example of a development driven program. But part of the reason for the success was that financial constraints were minimal.
Development driven research has a major problem.
It is a true gamble to put money on research and hope that a specific discovery will occur so that the specific development can continue. On the other hand, it is well established that research often leads to discovery of a new phenomenon even though the original research often failed. As a result, past experience tells us that if we let development lead the way we can expect the development to at times also fail because the research that is requested will sometimes fail. On the other hand, some programs will succeed, and some of the programs that fail will have positive spin off results. Thus, it would seem reasonable to split the funding with some percentage going into pure research and the remainder into directed development to address the social and national needs.