So it seems rather silly that will all these Internet startups that anyone who is any good is going to go to a startup and make zillions. So where does that leave people who work for the government?
This leads you to conclude that if you want effective government agencies, why not instead have a system for delegating tasks to private companies and hold them accountable to strict performance standards. And then pay government workers that supervise these government contractors bonuses based on how much they save the government and how well the subcontractors perform. So everyone wins under this scenario.
Edison Schools are a good example how this can be done.