In this paper we analyze the (historical) co-evolution of technological development and economic progress (by relating public and private R&D investment, patenting, and corporate profitability). We relate to the work of Schmookler(1966), Griliches(1990), Pakes & Griliches(1980) and Pakes(1986) who all have studied the techno-economic interplay by considering patents as in indicator of technological performance. We use United States industry and government data over the period 1953-1998 (45 years). Co-evolution analysis over this period reveals a strong interdependency among the variables. Patent evolution is strongly related to the development of private R&D and corporate profitability; the levels of public and private R&D expenditure in combination with the level of technological output (i.e. patents) have a strong predictive and explanatory power towards corporate profitability (R-2 value of 94.9%). Causality tests reveal a joint determination between R&D investment and corporate profitability (L=2; p < 0.01).