INTERNATIONAL: Three Economists Win Nobel for Innovation-Driven Growth
Three laureates, one core idea
The Royal Swedish Academy of Sciences has awarded the 2025 Nobel Prize in Economic Sciences to Joel Mokyr, Philippe Aghion, and Peter Howitt for their work that explains how innovation drives long-term economic growth.
The committee framed the award as recognition of research showing why science, markets, and firms must interact for sustained progress.
How the prize was split
The total award is 11 million Swedish kronor. Joel Mokyr receives one half of the prize for identifying the prerequisites for sustained growth through technological progress; Philippe Aghion and Peter Howitt share the other half for developing the theory of sustained growth through creative destruction.
What Mokyr showed
Mokyr’s work combines economic history and the history of ideas to explain why modern growth emerged when it did.
He emphasized the social and institutional conditions that let scientific knowledge convert into widely adopted technologies, for example, open scholarly exchange, mechanical competence, and incentives for experimentation.
His research helps explain why technological breakthroughs translate into lasting rises in prosperity only under certain conditions.
The Aghion–Howitt framework: creative destruction
Philippe Aghion and Peter Howitt developed a formal, macroeconomic model of creative destruction, the process where new firms and technologies replace older ones, raising productivity despite short-term disruption.
Their 1990s work made Schumpeter’s intuition precise and tractable, clarifying tradeoffs between competition, innovation incentives, and social costs during technological transitions.
The model remains central to debates on R&D policy, competition law, and job adjustment policies.
Why this matters today
Policymakers are wrestling with sluggish productivity trends, rising market concentration, and the disruptive effects of AI and biotech.
The laureates’ research highlights policy levers that matter most: preserving competition, supporting basic research, and designing transition policies that protect workers without blocking innovation.
The Nobel committee noted that these insights are especially relevant for economies aiming to sustain long-run growth.
Quick facts
- Winners: Joel Mokyr (Northwestern University; also Tel Aviv University), Philippe Aghion (Collège de France, INSEAD, LSE), and Peter Howitt (Brown University).
- Prize motivation: “for having explained innovation-driven economic growth.”
- Prize sum: 11 million SEK; Mokyr one half, Aghion and Howitt the other half.
Takeaway in one line
The 2025 Nobel in Economics underlines that innovation alone is not enough; institutions, competition, and policies that manage creative destruction are what turn ideas into lasting prosperity.