[SeanLuke]

I have the opposite opinion. US funding sources for science and engineering tend to be very government-heavy rather than industry-based; but in my experience those government grants, particularly DoD, emphasize research with specific practical ends. The obvious exception is NSF, but Europe also has similar obvious exceptions at about the same rate.

The big difference between the US and Europe, however, is that universities in the US depend on grants to fund PhD students. Many (most?) European countries have national funding programs for their PhDs, which frees up both the students and their advisors to work on whatever fancies them regardless of practicality. France is particularly notorious for this. US academics do not have this luxury.

In my field, by far the lion's share of impractical (Fun! I love it! But impractical) work comes from Europe.