As someone who is usually fairly "socialist" I always mostly disagree when people want to use the government, or companies for that matter, to promote innovation. There is already a mechanism for innovation called the market. You probably want the market regulated and you don't want to leave everything up to the market. But still, if you want innovative companies you should leave their success and failure to the market. Research and regulation can be decided on as you go along. What you should be focusing on is how to get people in a position to innovate in the first place.

Innovative companies don't rise and fall by 10% tax increase or decrease. They often make no money at all until the make a lot. The only people who are concerned about taxes are those who already have money. If you want to lower barriers you need to fix education, costs of living and security. You can't have every incentive saying to stay the course at a traditional job and expect new things to happen. These days everyone expects a large sum of money for themselves to fund their own company. That isn't something you get or can allocate for new things, especially not at scale. Because they are by nature new. So almost every industry started scrappy. Provide an advanced scrappy society and innovation will happen.

People often say "But if this is such a good idea why aren't people in those kinds of countries innovating?". They are. It is just that it is marginal in the beginning and then it gets too large to notice. People think it came out of nowhere, which it sort of did. Even in the US a lot of the innovation, if not most, is related to the relative safety of the university system and subsequent industries. A lot of the famous entrepreneurs from the earlier days of the tech industry are people who were relatively well off if not rich, at least in terms of education or family, who I guess weren't that excited about their prospects and therefor also didn't have much to lose. In a good way. They could go work in a garage startup for a few year and still get the normal job later. They didn't have to, or didn't know to, worry about a mortgage. At least not yet.

You always want to start something new from a position of, if not strength, at least abundance. The zero to hero idea is flawed. If you don't have unrealized potential either in yourself, your idea or the market there isn't something that can succeed. So you want to have more opportunities than you can realize. You want to have more motivation, time or skill than you need. Otherwise you are just going to do what needs to be done, which usually isn't innovation.

Then on top of that you can do all kinds of things. But without the underlying foundation innovation at scale isn't going to happen. Even doing targeted research, you always need more people and better education than you think. For every success there is a hundred average efforts. Which is okay. That is how everything, from science to music scenes, is built. Cities often wonder why their initiatives isn't working, but if you aren't prepared to take on ten thousand new people in a year your industry isn't going to happen. It is going to plateau before you even notices it exists.

At the end of the day, innovation is made by people. You optimize for people and you get new industries. That is every successful city for decades if not centuries. I guess most people wouldn't say that about the Bay Area today, but at one point it was far better than the alternative for a lot of people. Which is why they ended up there.