Government regulations that mandate some return (think telecommunications services for those in rural areas, pollution standards, etc.) can provide an incentive for monopolists/oligopolists to perform better according to some criteria. The problem is those mandates are not what we would always consider "innovative". By definition, they are often designed to incrementally improve on the status quo.
The game of politics has an important role. When there are oligopolies in many industries it is not unusual to see regulators getting jobs at the very companies they regulate. Think of the ties between the SEC and finance, CRTC in Canada and the communications sector, etc. Monopolists have a way of cementing their position in the economy and reducing the mandates that governments place on them.
On the flip side, monopolies often have little incentive to invest in improving their products/services, and find they can profit from making their products cheaper/worse.
Comparing one very effective and interesting skunkworks lab with the incredible explosion in choices and service in telecommunication, as well as drastically lower prices, that came when the monopoly was broken up?
I think you're demonstrating the anti-monopoly point handily.
The crashing and burning of a big monopoly may very well be a healthy event; but oh the damage they do before then...
IMO, innovation is usually fueled by competition. Where there's lots of competition, the need to innovate is the necessity for survival. I mean, how innovative was Microsoft in the 90's when they essentially had a monopoly on desktop computing? That's how we got stuck with IE 6 for so long...
Academic institutions are hugely monopolistic...
> Where there's lots of competition, the need to innovate is the necessity for survival.
That's the theory. In practice, competition drives bean-counting efficiency. See, e.g., Thinkpads before and after the Lenovo acquisition. Pretty much the only place you see innovation in that space is among companies that can carve out a niche based on brand or differentiating factors (Apple), or among companies that have a monopoly on a key piece of the supply chain (Intel, Microsoft).
I wonder what could make something like Comcast into a "good monopoly" though.
Another aspect is that commercial competition, while generally accepted as a system that in the end delivers superior results, seems woefully inefficient in terms of waste of resources, as opposed to something like academic competition, were people freely reuse competitors' previous work.