Well, with no context, either choice numbers one or two is correct. Perhaps others, too, as you imply.

Within context, though, it makes no sense. I'm not a beatnik connoisseur, but I know more than a little about cyberpunk. Cyberpunk is a literary genre. Thus, if you deconstruct that sentence to remove non-essential information and also remove the allusion to the beatnik movement, you get:

This particular literary movement was given focus by literary fiction.

That doesn't make any sense. Or, rather, it makes too much sense. It's obvious, and doesn't really mean anything. (Unless you want to make a claim that non-fiction could somehow be related.)

I've always thought of the beatnik movement being a little more, but I don't see anything in cyberpunk beyond literature. Okay, there are some poseurs who like to strut around pretending to be some lame approximation of a cyberpunk-inspired character, but that hardly counts.

I think what the author really means to say is that both movements were insigated by literary fiction, assuming there are any ``movements'' to have been instigated. (Edit: And even then, it's stupid. Of course a literary movement is insigated by writing. I suppose you could have such a movement insigated by thought about the movement -- Pre-Raphaelitism comes to mind as an example -- but that would be the exception, and not the rule.) This most closely lines up with #1.