Nobel in Economics Highlights Innovation's Role and Creative Destruction

Stockholm, Oct 13 (AP) Joel Mokyr, Philippe Aghion, and Peter Howitt have been awarded the Nobel Memorial Prize in Economics for their groundbreaking research on the influence of innovation on economic growth and the process known as “creative destruction,” in which new technologies supplant older ones.

The laureates represent distinct yet complementary approaches within the field of economics. Mokyr, an economic historian associated with Northwestern University, explores long-term economic trends through historical data. In contrast, Aghion of the Collège de France and the London School of Economics, along with Howitt of Brown University, employ mathematical models to elucidate how creative destruction operates.

Seventy-nine-year-old Mokyr, originally from the Netherlands, expressed surprise at winning the award as he was contacted by an AP reporter during his morning routine. “People always say this, but in this case, I am being truthful — I had no clue that anything like this was going to happen,” he remarked. When his students inquired if he might receive the Nobel, Mokyr humorously commented, “I told them that I was more likely to be elected Pope than to win the Noel Prize in economics — and I am Jewish by the way.” Despite nearing 80, Mokyr has no plans to retire, emphasizing his lifelong passion for his work.

Aghion also expressed astonishment upon receiving the honor, saying, “I can't find the words to express what I feel.” He plans to invest his portion of the prize money back into his research laboratory. Discussing contemporary issues like global trade wars and protectionism, Aghion stated his disapproval of protectionist policies in the US, stating, “That is not good for ... world growth and innovation.”

The award highlights their contributions to explaining and quantifying the concept of “creative destruction,” historically associated with economist Joseph Schumpeter, who articulated it in his 1942 work, “Capitalism, Socialism and Democracy.” The Nobel committee recognized Mokyr’s contributions in emphasizing the importance of understanding not just the success of innovations, but also the scientific explanations underpinning them. Aghion and Howitt have contributed through their scholarly work, including a seminal 1992 article using mathematical models to analyze sustained growth.

Aghion has been influential beyond academia, notably aiding French President Emmanuel Macron’s economic strategy during the 2017 election and co-chairing a 2024 report positioning France as a leader in artificial intelligence.

John Hassler, chair of the Nobel committee for economic sciences, remarked on the laureates' work by saying, “Economic growth cannot be taken for granted. We must uphold the mechanisms underlying creative destruction to avoid stagnation.”

The prize, amounting to 11 million Swedish kronor (nearly USD 1.2 million), is divided as follows: one-half to Mokyr and the remaining half shared between Aghion and Howitt. Recipients also receive an 18-carat gold medal and a diploma.

Although formally named the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel and established by the central bank in 1968, this prize is traditionally presented alongside the original Nobel Prizes on December 10, commemorating Nobel’s death anniversary. While the economics prize has been awarded to 99 laureates over 57 occasions, only three of these recipients have been women, highlighting a significant gender disparity.

The past week witnessed announcements for Nobel honors in medicine, physics, chemistry, literature, and peace. (AP) SKS SKS

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