The Destruction of Bell Labs and the Growth of the Academic-Industrial Complex

From the New York Times comes this article about the new relationship between academia and industry. The article highlights the relatively new arrangements between the two in order to facilitate 'over the horizon' innovation and inventions.
I was involved, when I was running a department within TIAX, LLC, in creating a business strategy around this concept. Let me try to summarize the arguments for and against:

Pro:
- Reduced overhead
- Excellent PR/markeing power, sound great to Wall Street (who wouldn't prefer MIT doing your research ?)
- No ability to directly link investment performance with business goals
- Govt. funding for R&D and basic research has disappeared and industry need a new partner to share the costs. Every major technology breakthrough; from the computer, to the integrated chip, to the web, to cellular phone was funded by the US government, usually from within the military

Con:
- Few if any of the innovations ever make it to market
- Relies on the assumption that breakthroughs do not need a team to have deep experience or consistency. Since the academic work is lead by students team regularly turn over, member leave, and projects are re-scoped. Think of the decades spent by the MIT Robo-Tuna teams, the number of times the project was re-invented and the lack of marketable results.

One example the business press likes to use as an argument in support of the academic-industrial complex is Bell Lab's never earned a dollar from the invention of the integrated circuit processor. This is a failure not of the R&D lab, but of Bell's short-sighted business management who failed to have the creativity to see how the future could be so drastically changed by their invention.