One thing that is needed for startups and to achieve 'lots of innovation' is a market where wealth is well distributed.
Where wealth is concentrated in the hands of the few, fewer decisions are made about how to spend it.
In a 'healthy' economy where the wealth is well distributed, lots of differing decisions are made about where to spend it and there is room for lots of small companies doing many different things.
Once wealth is concentrated, and fewer people are spending it there are less decisions being made and there is less room for lots of small companies.
One of the great harms caused by an economy where the government and just a few big players are doing the spending is that innovative small companies depend entirely on partnership with large companies to get past the gatekeepers and do well.