For stuff like this, it usually starts from the bottom. Engineers have ideas, convince others to help them work on their ideas, build prototypes (alone or with others), sometimes get help from product managers to develop a business plan, then pitch it to senior leadership to get some funding.
It takes a lot of skill, tact, and product acumen to get things out the door -- probably the same set of skills as you would need outside Google. (Except that within, you have access to more and better resources, but the bar is much higher.)
Obviously, this doesn't mean that every idea will stick... a lot of them won't -- some don't make money, some don't provide real value, and some are just terrible ideas. But it's a much better process than just top-down alone.
It takes a lot of skill, tact, and product acumen to get things out the door -- probably the same set of skills as you would need outside Google. (Except that within, you have access to more and better resources, but the bar is much higher.)
Obviously, this doesn't mean that every idea will stick... a lot of them won't -- some don't make money, some don't provide real value, and some are just terrible ideas. But it's a much better process than just top-down alone.