One of the best articles by the late William A. Niskanen, which I used to great effect in my recent "Energy Economics" course, is his take-apart of "Bacon's Chain." The article is titled "R&D and Economic Growth: Some Cautionary Tales," and appears in his book, Reflections of a Political Economist [pdf]. Here's how Niskanen states Bacon's Chain, named after the famous philosopher and scientist, Francis Bacon:
Government financing is necessary to provide the adequate level of basic research, which is necessary to provide the scientific foundation for advanced technology, which accounts for a large part of economic growth.
Niskanen shows how weak each link is. He gives some startling evidence that basic research is NOT necessary for advanced technology. I won't repeat his evidence here. I will say that he gives copious evidence from a number of studies.
I thought of Niskanen's work while reading David P. Billington, The Tower and the Bridge: The New Art of Structural Engineering, Princeton University Press, 1983. Billington fills a hole in Niskanen's argument by explaining why basic research is not necessary for technology:
There is a fundamental difference between science and technology. Engineering or technology is the making of things that did not previously exist, whereas science is the discovering of things that have long existed. Technological results are forms that exist only because people want to make them, whereas scientific results are formulations of what exists independently of human intentions. Technology deals with the artificial, science with the natural.
He later quotes a British scholar, Michael Mulkay, who writes:
[S]cience seems to accumulate mainly on the basis of past science, and technology primarily on the basis of past technology.