Make PhD admissions and stipends based on a open market
PhD admissions are often a binary choice about a student: a no or yes with a guaranteed stipend (in the natural sciences at least). Yet, not all students are created equal. PhD admissions should recognize that students lie on spectrum of talent, skills, and background. One approach is simple. Offer admissions to students with a stipend based on those factors. This creates an interesting spread of talent across institutions. An offer to work at Harvard for 40k might be less enticing if there was an alternative offer at UT-Austin for 70k. More importantly, the students at the margin of admission will have opportunity to study at the best universities at the cost of no stipend.
The key effects are more attraction of talent from other industries, equal division of talent across institutions, and increased competition among academic institutions.