"There would be as many as the market demands"
I disagree.
There are many, many industries wherein barriers to entry are far too significant for private capital to take the risks - moreover - especially in areas of innovation, some things would not exist.
The internet itself would not have existed without having first been developed by the military, and then by academia.
Were it not to have been built - what 'startup' in 1965 was going to spend 30 years developing protocols, selling 'it' (whatever 'it' was in terms of a product) to universities etc.
Think GPS. Who's going to invent this tech out of nothing, and pay for a satellite program (back in the day when it was obscenely expensive to put stuff in space) for a market that does not exist? What's the business plan in 1965 for a 'GPS startup'?
Aircraft is much the same way.
Europeans are not stupid - they have smart enough capital and R&D, but the only way Airbus got off the ground was by massive political intervention.
Same for Nuclear Energy and some other forms of energy development.
And all of this aside from the fact that so much advancement came out of WW2 (and other wars) - which is R&D that the industry receives as a free, externalized benefit.