The trouble with this industry view that research is expected to be done in academia is that academia isn't immune from these short-term pressures. There are some five-year NSF grants and some other opportunities for long-term funding, but many grants are shorter than that, and they also seem to favor evolutionary work rather than revolutionary work. Here is a quote from Alan Kay (http://worrydream.com/2017-12-30-alan/):

"[T]his syndrome [that the customer is always right] has been killing NSF funding in computing for many decades. They require in their proposals an explanation of how one is going to 'solve the problem', and this has effectively filtered out all but engineering type proposals (some of them have been good -- but most of the stuff that needs to be done requires funding for 'problem finding' and NSF -- for fear of Congress -- has been unwilling to do this)."

I suppose a full professor at a research university who already has tenure can perform non-funded research, perhaps advising grad students on teaching assistantships or external fellowships. But this would be a dangerous career move for an assistant professor, or even for an associate professor who already has tenure but who wants to be promoted to full professor. No funding means no grad students and postdocs to help carry out a professor's research agenda unless those students and postdocs are externally funded. No funding means less overhead money going to the university. No funding often leads to no tenure. Getting funding means "getting with the program" and doing the type of work that funders want in the way that they want it.

This, combined with my love for teaching, is why I want to be at a teaching university where there are fewer pressures regarding fundraising and publication (those pressures don't go away, but they are not as big as at research universities). I can control the quality of my teaching. I don't have full control over whether my grant applications and papers get accepted or rejected.

We need to convince those funding science, whether they are in industry or government, that science doesn't work on a schedule. Funders can't just decree, "I want a cure for cancer in 18 months." Science is inherently risky; experiments fail, hypotheses are wrong, setbacks happen, and sometimes knowledge accumulation is slow. Funders who don't allow for failure are stifling science by pushing scientists into incremental, evolutionary projects that are "safe" but don't necessarily lead to breakthroughs.

But I believe the reason why such short-term thinking is encouraged by funders of science is because of a desire for accountability. Taxpayers funding academic research would be more likely to vote for politicians who encourage spending on science if public funds went to research that many taxpayers would deem "useful." Companies funding industrial research want to fund work that is relevant to the company. A lot of funders have this unfounded fear that scientists will just take the money and blow it on "thinking" at beachside resorts.

There needs to be accountability to make sure that the money doesn't get wasted on non-science activities, but at the same time funding should not stifle scientists' ability to do science.

Regarding your idea about a new type of Y-Combinator-style model for funding science, I like the idea. In a world without places like the 1970s Bell Labs or Xerox PARC, this would be a great incubator for the next generation of these types of products. We got people like Alan Kay and Dan Ingalls who led the scientific efforts, but we also have people like Steve Jobs and Bill Gates who were able to recognize the business value of this work, and we also have people like Charles Simonyi who successfully crossed over from research to entrepreneurship; his work on Xerox PARC's Bravo word processor led to Microsoft Word, which he made a fortune on.

One big challenge would be the accountability challenge from the funders: how will the funders hold the scientists accountable without resorting to micromanagement? How will the scientists retain their independence and not be pressured to pursue "sure bets" that are almost guaranteed to be productized rather than following their own interests, even if they run the risk of not leading to products that could be picked up by an entrepreneur?