Research lab to Market vs. Product Reverse Engineering...

This is a very interesting question and a difficult one too. Still I will attempt to answer...

Business ideas are usually generated by observers close to the customer; where they sense an unfulfilled need and create a business to address the gap. It may still lead to sizable business, but I think it is generally not associated with major technological breakthroughs.

Most of academic research (at least historically) was not business oriented. The researchers worked just to feel the joy of discovery / invention. However increasingly the research is becoming directed (try to solve a business problem). The implications are interesting... We no longer see many fundamental breakthroughs in basic sciences. For example compare the 1900-1950 period with 1950-2000; you will find that the second part of the century is full of technology breakthroughs and very few fundamental breakthroughs.

Overall, I no longer see the scientists who will spend 25 years of their life to make a fundamental breakthrough.

Basic Lab research to market vs. reverse engineering is a question of ethics at an individual level and a separate issue of business strategy. From lab to market could give you a first mover advantage while reverse engineering will give you lower costs and avoid many mistakes the first mover makes. There are cases in favour of both, so I guess the context plays an important role... I think it is more of an execution issue...