Encourage employees to use the 20% time to Innovate within the existing projects;
for example, by finding ways to make them better or lower their costs.
This is already part of their regularly scheduled work. It's easy to sell research and enhancements to an existing product, and there's staff to do it. This is a non-issue.
It's also only fair that the benefit of their 20% projects get included in their productivity.
If an employee uses their intellectual resources to do something particularly innovative,
they should be given an opportunity to reduce their required working hours by 50%
with a net increase in pay and benefits, or an opportunity to move from "20% time" to
"40% time" working on their own projects.
This is also already the case. If your 20% project gets internal traction it will likely become your 80% job.
I completely disagree with the notion that the 20% back burner stuff isn't important to Google at this point. In a big organization it's hard to sell ideas without accompanying them with a working prototype. So the 20% research and prototyping new product ideas is more important than ever, or Google will cease to evolve. There's no benefit in large corporations stagnating; in fact, they represent a massive focus of resources. The corporate normal shouldn't be a slow fade into the eternity of history - the normal should be constant product evolution and progress.