I'm suspicious that the measure of "innovation" is the number of patents filed, but I can't confirm that from the article. In academia, good ideas rarely materialize into patents; they become papers, and the relevance/influence/prestige is quantified in the number of other papers that cite them.
Fortunately, many schools do support startups (financially, even) coming out of their grad schools. I haven't noticed any discussion on the success of this kind of support versus traditional VC, but it makes lots of sense for a grad student to turn a thesis project into a startup immediately after graduation.
There is a lot more happening on the enterprise/university front. My new startup took pre-commercial funding from a fund set up between a consortium of universities. I think this is a potential solution to the problems the blog author identified, but for the funds to work properly, they need to be administered and run by business people, not academics, and especially not academic administrators.
Fortunately, many schools do support startups (financially, even) coming out of their grad schools. I haven't noticed any discussion on the success of this kind of support versus traditional VC, but it makes lots of sense for a grad student to turn a thesis project into a startup immediately after graduation.