alt Hacker NewsI am not advocating for central planning. As I underscored in my comment, I advocate for something closer to the defense procurement model: where the market is failing to provide an appropriate off the shelf product and the state contracts an entity (usually a private company, but in the case of software it could be a public agency) to make it for them. This is a model that is currently in use in the US, in the EU, and actually worked well in the USSR too, their Ladas (and consumer products in general) might have been terrible but their defense industry was great.
The USSR defense industry also funded multiple OKBs that would compete with each other for projects.
In the EU's case, multi-party competitive bidding, with the winner taking the prime slot and others being assigned modular chunks of the product, sounds attractive.
Specifically, with the stipulation that results would be used as a criteria in future bids.
tl;dr -- Use the pyramid league system (e.g. from football) with promotion and relegation to efficiently create industry competition. Fuck up too many projects, down the pyramid you go.