Demand innovation is a new project that I am working on. It attempts to look at how market structure affects the demand for innovative products and greater productivity. Many markets are structured so that there is little pressure to either reduce costs or increase performance. Changing market structure can often lead to significant innovation with very little additional cost.
A one-page description is here.
A four-page description is here.
A book proposal is here.
Law, Economics, and Technology 
You make interesting and important points. Two little known areas of Regulation which are Significantly inhibiting innovation across all technologies are Sarbanes-Oxley and related financial regs and a patent system that fails to protect the rights of startups, individual inventors and small companies. For more information, please check out my blog at State of Innovation: http://www.hallingblog.com
This blog is devoted to Innovation, Economics and Patent Law.