In Matt Ridley's The Evolution of Everything: How New Ideas Emerge he repeats a claim originally made by Terence Kealey (my emphasis):
In 2003, the OECD published a paper on ‘sources of growth in OECD countries’ between 1971 and 1998, finding to its explicit surprise that whereas privately funded research and development stimulated economic growth, publicly funded research had no economic impact whatsoever. None. This earth-shaking result has never been challenged or debunked. Yet it is so inconvenient to the argument that science needs public funding that it is ignored.
This idea is clearly counter to the belief that government R&D is good for the economy (British scientists are currently campaigning for more money, for example, largely on the grounds that government R&D is important to the economy).
So who is right, Ridley or conventional wisdom? Is Government R&D demonstrably beneficial to economic growth?