Joel Mokyr, Philippe Aghion, and Peter Howitt have been awarded the 2025 Nobel Prize in Economic Sciences for their groundbreaking research on innovation and the concept of “creative destruction”, which explores how these elements can lead to economic growth and improved living standards globally. Their findings underscore how advancements in technology generate new products and production methods that can ultimately enhance the quality of life and health for populations worldwide.
The Royal Swedish Academy of Sciences, which bestows the Nobel Prize, acknowledged that while innovation has the potential to drive progress, continuous growth must not be assumed. “Economic stagnation, not growth, has been the norm for most of human history,” the Academy remarked, calling for vigilance against threats to sustained advancement.
In light of current global economic challenges, the laureates have voiced their concerns over various factors inhibiting growth, particularly pointing to U.S. President Donald Trump’s trade policies and educational reforms, which they argue may undermine the nation’s commitment to science and higher education. Mokyr highlighted that the administration’s stance on education could lead to significant repercussions for America’s scientific leadership, likening it to historical setbacks in scientific advancement seen during the Ming Dynasty in China.
The discussion around the implications of innovation is also tied to ongoing debates on economic inequality, a topic previously examined by 2024 Nobel laureates Daron Acemoglu, Simon Johnson, and James Robinson. Johnson notably emphasized how technological advancements often disproportionately benefit affluent elites rather than the broader population.
The award comes at a pivotal moment for the global economy, with many analysts suggesting that artificial intelligence may ignite a new wave of growth. Aghion cautioned that de-globalization and tariff barriers pose significant hindrances to progress, stating, “Anything that gets in the way of openness is an obstacle to growth.” He urged Europe to draw lessons from how the U.S. and China have balanced competition and industrial strategy, stressing the need for a nuanced approach to industrial policy in critical sectors like defense and technology.
Howitt echoed these sentiments, noting that tariffs could discourage innovation and hinder economic expansion. He expressed skepticism regarding efforts to reshore manufacturing jobs in the U.S., suggesting that while it may seem politically appealing, it does not align with sound economic practice.
This year’s award, formally known as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, is valued at 11 million Swedish crowns (approximately $1.2 million). The recognition of Mokyr, Aghion, and Howitt emphasizes the critical intersection of innovation and public policy in shaping the future of global economic health. Despite the challenges highlighted, their work inspires hope that through deliberate policy and strategic innovation, societies can navigate the complexities of modern economics towards sustainable growth and improved living standards for future generations.