2025 Nobel in Economics: Innovation as the engine of growth This year’s Nobel honors Philippe Aghion, Peter Howitt, and Joel Mokyr. The committee highlights one core point: long-run growth is powered by innovation and by the spread of knowledge.
Three angles, one engine. Economic historian Joel Mokyr shows why the Industrial Revolution took root in Europe. The reason is cultural: scientific curiosity, open debate, and idea circulation.
Where knowledge moves freely, innovation scales. Aghion and Howitt reframed growth theory. Technological progress is endogenous—it arises within the system. New ideas trigger creative destruction: better technologies displace older ones, productivity rises, and living standards improve.
Policy takeaways. Advanced economies rely on strong universities, entrepreneurial dynamism, and competition. Lower-income countries must invest to close gaps and build an environment where innovation takes hold. Bottom line: without open knowledge and rules that reward innovators, growth stalls.
