Economists Joel Mokyr, Philippe Aghion, and Peter Howitt have been awarded the 2025 Nobel Prize in Economic Sciences for their pioneering research on innovation, technological progress, and the transformative process of “creative destruction” that fuels long-term economic growth.
The Royal Swedish Academy of Sciences said the trio’s work has reshaped understanding of how new ideas, products, and industries replace outdated ones, driving productivity, higher living standards, and improved health and quality of life worldwide.
“Economic stagnation, not growth, has been the norm for most of human history,” the Academy said in a statement. “Their work shows that technological progress cannot be taken for granted, and that societies must actively safeguard and foster innovation.”
The laureates’ theories have become central to modern growth economics, explaining how innovation and competition interact to spur progress, while also warning of risks posed by protectionism, weak institutions, and declining investment in knowledge and education.
Speaking after the announcement, the winners cautioned that recent U.S. policies under President Donald Trump, including aggressive tariff threats and reforms to higher education, could undermine the foundations of innovation-driven growth.
Mokyr warned that restricting academic freedom and research funding risked a “scientific own goal” for the United States, whose prosperity has long depended on openness and discovery.
Aghion echoed that view, calling de-globalization and tariff barriers “obstacles to growth.”
“Anything that gets in the way of openness is an obstacle to growth,” he said. “Dark clouds are gathering as nations push for trade barriers and less cooperation.”
He urged Europe to reconcile industrial policy with competition principles to avoid falling behind the U.S. and China in emerging technologies like artificial intelligence, biotechnology, and clean energy.
“In the name of competition, Europe became too cautious on industrial policy. That has to change,” he said. Howitt, who described himself as “absolutely stunned” by the award, was similarly critical of protectionist trade measures.
“Starting a tariff war just reduces the size of the market for everybody,” he told Reuters. “It discourages innovation by weakening the scale effect that drives technological progress.”
He also questioned efforts to bring back manufacturing jobs to the U.S., saying they may make “political sense” but not economic sense. “We’re good at designing running shoes, but it’s best to let others make them,” he said.
The Nobel economics prize, formally known as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, was first awarded in 1969. Past recipients include renowned economists such as Ben Bernanke, Paul Krugman, and Milton Friedman.
This year’s award underscores the continuing importance of innovation and global cooperation at a time when the world economy faces disruptive change from artificial intelligence, trade disputes, and geopolitical rivalries.
As the Academy put it, “Innovation is not inevitable, it is a choice that societies must continue to make.”
Source: Reuters
Written By Rodney Mbua
