Nobel Economics Prize 2025 Awarded to Pioneers of Innovation-Driven Growth

The 2025 Nobel Prize in Economic Sciences was awarded Monday to three prominent economists — Joel Mokyr, Philippe Aghion, and Peter Howitt — for their pioneering contributions in explaining how innovation fuels long-term economic growth.

The Royal Swedish Academy of Sciences recognized the trio for their work in advancing our understanding of how technological progress and innovation can drive sustainable development through a process of continuous renewal — a theory central to modern economic thought.

“This year’s laureates have fundamentally changed the way we understand the engines behind economic prosperity,” said Jakob Hassler, chair of the Nobel economics committee. “Their research reminds us that growth is not automatic — it relies on fostering environments where innovation can thrive.”

The Architects of Modern Growth Theory

• Joel Mokyr, a professor at Northwestern University, was honored for his historical and empirical work demonstrating that innovation is not just trial and error, but a process underpinned by scientific understanding. According to the committee, Mokyr showed that for innovation to be self-sustaining, knowledge must be both cumulative and explainable.
• Philippe Aghion, affiliated with both the Collège de France and the London School of Economics, and Peter Howitt of Brown University were recognized for their collaborative work dating back to the early 1990s. Together, they developed a theoretical model of “creative destruction,” a concept originally introduced by economist Joseph Schumpeter.

Their model illustrated how new innovations disrupt existing markets by replacing outdated technologies or products, thereby fueling progress — but also displacing older economic structures.

Creative Destruction: The Double-Edged Sword of Growth

In their groundbreaking 1992 paper, Aghion and Howitt formalized the process of creative destruction into a mathematical model. The theory highlights how progress is inherently disruptive: as new technologies emerge, older ones are rendered obsolete, forcing firms and industries to adapt or disappear.

“The laureates’ work shows that economic growth cannot be taken for granted,” the committee noted. “We must uphold the mechanisms that underlie creative destruction, so that we do not fall back into stagnation.”

Their insights have not only shaped economic theory but have also influenced global policy debates about innovation, regulation, and competition.

A Legacy of Economic Thought

The economics prize, officially known as the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel, was established in 1968 and remains distinct from the original Nobel Prizes. Nevertheless, it is awarded alongside the other Nobel honors each year on December 10, the anniversary of Alfred Nobel’s death.

This year marks the 57th time the economics award has been presented. Since its inception, only three women have received the honor among 96 laureates, highlighting ongoing gender disparities in the field.

Last year, the prize was shared by Daron Acemoglu, Simon Johnson, and James A. Robinson for their work exploring the institutional foundations of prosperity — showing that countries with open, inclusive societies are more likely to achieve sustainable economic growth.

As the world faces new economic challenges — from artificial intelligence disruption to global inequality — the recognition of Mokyr, Aghion, and Howitt underscores the vital role of innovation in shaping the future of prosperity.