When the Royal Swedish Academy of Sciences announced the 2025 Nobel Prize in Economic Sciences, the focus was on a question that has long fascinated economists and historians alike -- what makes growth last? The answer, this year’s laureates showed, lies in innovation.
The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2025 was awarded “for having explained innovation-driven economic growth.” One half went to Joel Mokyr “for having identified the prerequisites for sustained growth through technological progress,” while the other half was shared by Philippe Aghion and Peter Howitt “for the theory of sustained growth through creative destruction.”
Together, their work explains why the world began growing at an unprecedented pace over the last two centuries, how societies sustain that growth, and what threatens it when innovation is stifled.
Also Read: Nobel Prize in Economics 2025 awarded to Joel Mokyr, Philippe Aghion and Peter Howitt
Joel Mokyr: The historian who decoded progress
As per the foundation, Joel Mokyr, born in 1946 in Leiden, the Netherlands, has spent his career bridging economics and history. A professor at Northwestern University in Illinois, he has dedicated decades to understanding how societies move from stagnation to sustained progress.
His research shows that innovation doesn’t thrive by accident -- it needs the right social and intellectual conditions. Mokyr argues that before the Industrial Revolution, inventions often fizzled out because people didn’t fully understand why they worked. Once scientific reasoning began underpinning technological advances, innovation became self-sustaining.
He also highlights a crucial cultural factor: societies must be open to new ideas and willing to embrace change. Without that openness, discoveries remain isolated sparks rather than igniting continuous growth.
Mokyr’s half of the Nobel Prize honours his identification of these conditions -- the fertile ground that allows technological progress to take root and flourish.
Philippe Aghion and Peter Howitt: The architects of creative destruction
If Mokyr explained the soil in which innovation grows, Philippe Aghion and Peter Howitt built the model that describes how it reshapes economies.
In 1992, the duo published a paper that formalised the idea of creative destruction -- the cycle in which new technologies and products replace the old. Each innovation is both “creative” in advancing progress and “destructive” in rendering existing firms or methods obsolete.
Philippe Aghion, born in Paris in 1956, is currently a professor at the Collège de France and INSEAD in Paris, and also affiliated with the London School of Economics. His work, often at the intersection of policy and theory, explores how governments can encourage innovation without smothering competition.
Peter Howitt, born the same year as Mokyr in 1946 in Canada, teaches at Brown University in the United States. A longtime collaborator of Aghion, he helped translate Joseph Schumpeter’s original intuition about creative destruction into a rigorous economic framework that now underpins modern growth theory.
Their shared half of the Nobel Prize recognises how their model reshaped our understanding of progress. They showed that innovation not only drives growth but also produces conflict, between old and new industries, established players and upstarts. Managing these tensions, they argue, is key to preventing stagnation.
“Growth cannot be taken for granted”
John Hassler, chair of the Committee for the Prize in Economic Sciences, summed up the laureates’ message simply: “The laureates’ work shows that 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.”
Their theories help explain why some societies continue to prosper while others stall, why technology can be both a disruptor and a saviour, and why maintaining openness to change remains essential in an age of rapid transformation.
Also Read: Nobel Prize 2025 Winners: Here's the full list across all categories
The prize and the legacy
The 2025 Nobel Prize in Economics carries a total award of 11 million Swedish kronor -- one half to Joel Mokyr, and the other half shared by Philippe Aghion and Peter Howitt.
All three laureates share a connection through the institutions that shaped them: Mokyr earned his PhD from Yale University in 1974; Aghion completed his doctorate at Harvard in 1987; and Howitt received his PhD from Northwestern University in 1973.
Beyond academia, their ideas continue to shape how policymakers think about innovation, inequality, and long-term prosperity. Their work underscores a timeless truth -- that progress depends not only on invention but also on the courage to let the new replace the old.
The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2025 was awarded “for having explained innovation-driven economic growth.” One half went to Joel Mokyr “for having identified the prerequisites for sustained growth through technological progress,” while the other half was shared by Philippe Aghion and Peter Howitt “for the theory of sustained growth through creative destruction.”
Together, their work explains why the world began growing at an unprecedented pace over the last two centuries, how societies sustain that growth, and what threatens it when innovation is stifled.
Also Read: Nobel Prize in Economics 2025 awarded to Joel Mokyr, Philippe Aghion and Peter Howitt
Joel Mokyr: The historian who decoded progress
As per the foundation, Joel Mokyr, born in 1946 in Leiden, the Netherlands, has spent his career bridging economics and history. A professor at Northwestern University in Illinois, he has dedicated decades to understanding how societies move from stagnation to sustained progress.
His research shows that innovation doesn’t thrive by accident -- it needs the right social and intellectual conditions. Mokyr argues that before the Industrial Revolution, inventions often fizzled out because people didn’t fully understand why they worked. Once scientific reasoning began underpinning technological advances, innovation became self-sustaining.
He also highlights a crucial cultural factor: societies must be open to new ideas and willing to embrace change. Without that openness, discoveries remain isolated sparks rather than igniting continuous growth.
Mokyr’s half of the Nobel Prize honours his identification of these conditions -- the fertile ground that allows technological progress to take root and flourish.
Philippe Aghion and Peter Howitt: The architects of creative destruction
If Mokyr explained the soil in which innovation grows, Philippe Aghion and Peter Howitt built the model that describes how it reshapes economies.
In 1992, the duo published a paper that formalised the idea of creative destruction -- the cycle in which new technologies and products replace the old. Each innovation is both “creative” in advancing progress and “destructive” in rendering existing firms or methods obsolete.
Philippe Aghion, born in Paris in 1956, is currently a professor at the Collège de France and INSEAD in Paris, and also affiliated with the London School of Economics. His work, often at the intersection of policy and theory, explores how governments can encourage innovation without smothering competition.
Peter Howitt, born the same year as Mokyr in 1946 in Canada, teaches at Brown University in the United States. A longtime collaborator of Aghion, he helped translate Joseph Schumpeter’s original intuition about creative destruction into a rigorous economic framework that now underpins modern growth theory.
Their shared half of the Nobel Prize recognises how their model reshaped our understanding of progress. They showed that innovation not only drives growth but also produces conflict, between old and new industries, established players and upstarts. Managing these tensions, they argue, is key to preventing stagnation.
“Growth cannot be taken for granted”
John Hassler, chair of the Committee for the Prize in Economic Sciences, summed up the laureates’ message simply: “The laureates’ work shows that 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.”
Their theories help explain why some societies continue to prosper while others stall, why technology can be both a disruptor and a saviour, and why maintaining openness to change remains essential in an age of rapid transformation.
Also Read: Nobel Prize 2025 Winners: Here's the full list across all categories
The prize and the legacy
The 2025 Nobel Prize in Economics carries a total award of 11 million Swedish kronor -- one half to Joel Mokyr, and the other half shared by Philippe Aghion and Peter Howitt.
All three laureates share a connection through the institutions that shaped them: Mokyr earned his PhD from Yale University in 1974; Aghion completed his doctorate at Harvard in 1987; and Howitt received his PhD from Northwestern University in 1973.
Beyond academia, their ideas continue to shape how policymakers think about innovation, inequality, and long-term prosperity. Their work underscores a timeless truth -- that progress depends not only on invention but also on the courage to let the new replace the old.
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