The Royal Swedish Academy of Sciences has awarded the 2025 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel to Joel Mokyr, Philippe Aghion and Peter Howitt “for having explained innovation-driven economic growth.”
According to the Nobel Committee, one half of the prize goes to Joel Mokyr “for having identified the prerequisites for sustained growth through technological progress,” while the other half is shared by Philippe Aghion and Peter Howitt “for the theory of sustained growth through creative destruction.”
For the first time in human history, the past two centuries have witnessed contiConceptual representation of innovation-driven economic growth, showing the evolution from industrial factories to futuristic digital technology and roboticsA visually rich composition merging imagery of industrial-era machinery with modern robotics and AI technology, representing humanity’s journey from invention to innovation-driven growth that sustains modern economies.
poverty and improving global living standards. The 2025 laureates have provided groundbreaking insights into the forces that make such growth possible.
Joel Mokyr, a renowned economic historian, traced the origins of sustained growth to the Industrial Revolution, emphasizing that progress depends not only on practical inventions but also on scientific understanding of how and why things work. He highlighted the importance of intellectual openness and societies’ willingness to embrace change.
Meanwhile, Philippe Aghion and Peter Howitt developed a mathematical model of “creative destruction,” a concept originally introduced by Joseph Schumpeter. Their theory explains how new technologies and innovations continuously replace old ones, creating economic dynamism but also social and industrial tension.
The Nobel Committee noted that managing these conflicts—between innovation and incumbency—is crucial. Without a constructive balance, powerful interest groups may resist progress and block new ideas that threaten their dominance.
The laureates’ combined work demonstrates how innovation, competition, and openness together create the conditions for long-term prosperity.
