The reality is as follows:
- ARPANET is considered the earliest form of the internet, which was developed by DARPA (paid by taxpayers)
- Many patents for internet based technologies are held (or were held) by universities which were paid for by taxpayers
- The first proposal of hypertext by Tim Berners-Lee was done in his capacity as a contractor to CERN, which is a multi-government-backed entity
The question, that will be debated for centuries, is who has profited from all of this? Just think of your laptop for a second. There are probably a million different functions, services, applications, etc. all playing together harmoniously. It's the purest form of amalgamated advances in both government backed projects, FOSS, and for-profit entities all dancing together harmoniously. Many people would argue the ones who sell the final good are creating the most value, because they are essentially responsible for bringing all of those disparate parts together, and hence why they would argue they deserve most of economic profit.
The big fish are the government and private industry that helps drive forward, but when you break it down to the particles that make up the system, you'll find individuals, inventors, entrepreneurs, good managers, smart financial navigation and encouraging of the open creative state.
Anything that allows the smallest of nodes in that system to flourish, the individuals, should be noticed and rewarded.
https://www.sciencemag.org/news/2017/03/data-check-us-govern...
Generally, the pattern has been that government and university funded researchers make the early discoveries, and then corporations do the research towards applying them. Universities benefit from patents, but the federal government doesn't.
But what we see sometimes (alternative energy, drug research, e.g.) is government funding of applied research, and that isn't good for the market or the science, and should be called out.
Even if they wanted to use it purely internally, they'd have to hire a company to manufacture what they want. I suppose a country like China could use a state run company instead of a private one?