The final Nobel award of the season arrived with a bang on Monday, October 13, 2025! The Nobel Memorial Prize in Economic Sciences was awarded to three visionary researchers for their groundbreaking work explaining the phenomenon that drives global prosperity: innovation-driven economic growth.
Their collective work sheds light on the dynamic process of “creative destruction”, where new technologies and ideas replace older ones, shaping the rhythm of progress across generations.
The prestigious honor—and the 11 million Swedish kronor prize—was shared by Dutch-born Joel Mokyr, 79, of Northwestern University; French economist Philippe Aghion, 69, of the Collège de France and the London School of Economics; and Canadian-born Peter Howitt, 79, of Brown University.
Table of Contents
The Pioneers of Creative Destruction
- Joel Mokyr, 79, a Dutch-born economist at Northwestern University, has long studied how technological progress transforms societies.
- Philippe Aghion, 69, from the Collège de France and London School of Economics, and Peter Howitt, 79, from Brown University, are co-authors of influential models that formalized the mechanisms of innovation-led growth.
Together, their research deepened economists’ understanding of how ideas spread, evolve, and fuel prosperity — even as they disrupt industries and displace older systems.
Creative Destruction: The Core of Capitalism
The concept of creative destruction, first popularized by Joseph Schumpeter in 1942, lies at the heart of the laureates’ work. It describes how new innovations “destroy” outdated technologies and business models, paving the way for economic renewal.
The economists’ findings help explain historical and modern examples alike:
- Steam engines replacing horse-drawn wagons.
- E-commerce transforming traditional retail.
- Streaming platforms replacing DVDs and CDs.
- Digital advertising reshaping media industries.
Their models quantify this process and highlight the balance between progress and disruption — showing that innovation boosts long-term welfare but can also cause short-term displacement.
From Theory to Policy: How Innovation Shapes Growth
Aghion and Howitt’s 1992 growth model revolutionized economic thought by showing how continuous innovation sustains growth. They emphasized that markets dominated by a few powerful firms can slow down innovation, while open, competitive environments foster creativity and new ideas.
Their research underscores the importance of:
- Supporting workers affected by technological change, not just preserving outdated jobs.
- Encouraging social mobility, so economic opportunity isn’t limited by family background.
- Maintaining healthy competition, especially in industries like tech and telecom.
As John Hassler, chair of the Nobel committee, noted:
“Economic growth cannot be taken for granted. We must uphold the mechanisms that underlie creative destruction so that we do not fall back into stagnation.”
Mokyr’s Optimism: Measuring the Invisible Benefits of Innovation
Joel Mokyr’s work focuses on the cultural and historical context of innovation. He argues that even when new technologies — like Spotify or online education — don’t immediately reflect in GDP data, they dramatically enhance human welfare.
He also emphasizes that while innovation causes temporary disruptions, it ultimately creates new opportunities, new industries, and better standards of living — echoing his belief that optimism, openness, and curiosity are key drivers of progress.
A Wake-Up Call for Global Economies
The 2025 Nobel announcement comes at a critical time for the global economy. As Europe faces a growing productivity gap with the U.S. and China, Aghion stresses that fostering innovation through research funding and venture capital is essential to remain competitive.
He also warns that policies must ensure fair competition in fast-growing fields like artificial intelligence, where existing big players could otherwise stifle newcomers.
“Those who innovate,” Aghion said, “will win this competition.”
Behind the Scenes: Morning Surprises and Shared Joy
All three laureates were taken by surprise when they received the news. Mokyr, jokingly, had told his students he was “more likely to be elected pope” than to win the Nobel. Aghion called it “a dream come true” to share the prize with his longtime collaborators, while Howitt admitted he initially thought the early-morning call was a prank.
Prize Details
The 2025 Nobel Memorial Prize in Economic Sciences comes with a total of 11 million Swedish kronor (approximately $1.2 million).
- Joel Mokyr receives half, while Aghion and Howitt share the other half.
Each laureate also receives an 18-carat gold medal and a diploma at the Nobel ceremony on December 10, the anniversary of Alfred Nobel’s death.
Short Biographies
Joel Mokyr
(Northwestern University)
| Detail | Information |
| Born | July 26, 1946 (age 79), Leiden, Netherlands |
| Nationality | Dutch, Israeli, and American |
| Current Position | Robert H. Strotz Professor of Arts and Sciences and Professor of Economics and History at Northwestern University; also a Sackler Professorial Fellow at Tel Aviv University. |
| Key Contribution | Awarded one half of the prize “for having identified the prerequisites for sustained growth through technological progress.” |
| Background | Mokyr is a highly regarded economic historian. Born into a Jewish family of Holocaust survivors, he was raised in Haifa, Israel. He earned his B.A. from the Hebrew University of Jerusalem and his Ph.D. in Economics from Yale University in 1974. He joined the faculty at Northwestern University in 1974, where he has remained a prominent figure ever since. |
| Nobel-Recognized Work | His work explains that before the Industrial Revolution, technological progress often stalled because people knew how certain inventions worked, but not the underlying scientific reasons why. Mokyr demonstrated that sustained, self-generating growth became possible only when scientific and “useful knowledge” (both propositional and prescriptive) became cumulative, systematic, and widespread. He also emphasizes the critical role of social and institutional openness to new ideas and change. |
Philippe Aghion
(Collège de France and London School of Economics)
| Detail | Information |
| Born | August 17, 1956 (age 69), Paris, France |
| Nationality | French |
| Current Position | Professor of Economics at the Collège de France and the London School of Economics (LSE). He is also affiliated with INSEAD. |
| Key Contribution | Shared one half of the prize with Peter Howitt “for the theory of sustained growth through creative destruction.” |
| Background | Aghion is a leading figure in macroeconomics and growth theory. He is the son of Gaby Aghion, the founder of the French fashion house Chloé. He received his Ph.D. in Economics from Harvard University in 1987. His academic career includes roles at MIT, Oxford University, University College London, and a long tenure at Harvard University before moving to his current positions. |
| Nobel-Recognized Work | In collaboration with Peter Howitt, Aghion pioneered the Schumpeterian Growth paradigm. Their influential 1992 article constructed a rigorous mathematical model for “creative destruction,” the process where new, superior products and firms constantly replace older ones. This cycle of innovation (creation) and obsolescence (destruction) is what drives sustained, long-term economic growth. His subsequent work has focused on the policy implications of this theory, exploring how competition, policy, and institutions can best foster innovation. |
Peter Howitt
(Brown University)
| Detail | Information |
| Born | May 31, 1946 (age 79), Guelph, Canada |
| Nationality | Canadian |
| Current Position | Lyn Crost Professor of Social Sciences (Emeritus) at Brown University. |
| Key Contribution | Shared one half of the prize with Philippe Aghion “for the theory of sustained growth through creative destruction.” |
| Background | Howitt is a Canadian-born economist specializing in macroeconomics and monetary theory. He earned his B.A. from McGill University, his M.A. from the University of Western Ontario, and his Ph.D. in Economics from Northwestern University in 1973. He taught at the University of Western Ontario for nearly 25 years before joining Brown University in 2000, where he is now Professor Emeritus. |
| Nobel-Recognized Work | His decades-long collaboration with Philippe Aghion produced the seminal mathematical model of “creative destruction.” They translated the intuitive concept—originally from economist Joseph Schumpeter—into a formal framework that demonstrates how investment in research and development (R&D) is incentivized by the potential for temporary monopoly profits, and how this constant, competitive cycle of new innovations replacing old ones is the engine of sustained economic growth and higher living standards. |
Innovation as Humanity’s Lifeblood
This year’s Nobel laureates remind us that innovation is not just about new products — it’s about renewing society itself. Their work on creative destruction explains why economic progress requires both imagination and resilience: imagination to create the future, and resilience to adapt when old systems fade away.
As economies grapple with technological disruption and inequality, their insights offer a guiding principle: sustain innovation, support people through change, and never stop reinventing.