Economic Innovation and Creative Destruction: Nobel Laureates’ Work Discussed at Utrecht

Joel Mokyr, Philippe Aghion, and Peter Howitt have been awarded the 2025 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. This significant recognition is for their substantial contributions to understanding the conditions and mechanisms that drive long-term economic growth. Their work earns accolades not only in terms of advancing our understanding of past and theoretical economics but also in providing quite useful, pragmatic advice for overcoming problems in the contemporary world. Joel Mokyr is well-recognised among top economic historians for linking cultural and institutional determinants to technological changes. His strongest works, The Lever of Riches and A Culture of Growth, consider how ideas, values, and knowledge diffusion drove the Industrial Revolution and continued to maintain innovativeness in the West. However, the research examines why certain societies stagnated while others were effectively tethered in cycles of incremental progress. His scholarship continues to shape economists' and historians' understanding of the preconditions under which innovation would take place in the economy.

Philippe Aghion and Peter Howitt have become well-known as the architects of the Schumpeterian growth model, which addresses the phenomenon of creative destruction. This model is valid in the argument that innovation is never an accident, but is in fact a continuous process in which new technologies replace and become displaced or make obsolete old ones. Under their framework, most perpetual replacement shall concern productivity, the living standards of the people, and rejuvenation of the economy. The Nobel Economics Prize is among the highest accolades in the profession, honouring scholars whose research has contributed extensively to both theoretical development and practical application. While not included in Alfred Nobel's original bequest, the Economic Sciences Prize was begun in 1968 by the Swedish National Bank and presented yearly by the Royal Swedish Academy of Sciences. It serves an important function in shining a light on studies that tackle pressing worldwide issues and serve to drive the development of economic sciences.

Essentially, creative destruction is new technologies displacing old ones, reorganising industries and determining the long-run economic growth. We know that this process, by all means, will progress, but it also has some disruptive value in obsoleting some jobs and skills. Aghion and Howitt's model illustrates to policymakers how innovative and social stability can be managed while stressing the need for educating, retraining, and investing in inclusive institutions that cushion the effects of technological change on people. In this period of digitalisation, particularly in an era of climate innovation and productivity-boosting AI, their study has been very apt. So fast are the changes occurring in economies today that understanding why they grow will help in building resilient and inclusive frameworks. The research of the laureates presents a model of how societies may use innovation and make its dividends more widely accessible.

This year's prize highlights the abiding significance of innovation, policy, and institutional design to drive economic outcomes. It also provides insight into the reasons why the recent world has seen unprecedented improvements in health, incomes, and prosperity over the last two centuries, pulling millions out of poverty and reshaping global prosperity. To delve into these concepts deeper, Professor Charles van Marrewijk of the Utrecht University School of Economics (U.S.E.) will give a pop-up lecture on Thursday, 6 November from 11:00–12:00 a.m. An expert in international economics and theory of growth, Professor van Marrewijk will share his thoughts on the contributions of the laureates and how they apply to today's economic issues.

This activity is one of Utrecht University's efforts to encourage technological activities in the academy and encourage debate regarding global trends in economics. The session will allow for questions and discussion time, providing an excellent chance to discuss the ideas behind this year's series of Nobel lectures. For the curious, the Royal Swedish Academy of Sciences releases the formal announcement and prize description. Those interested can also refer to Mokyr's A Culture of Growth or Aghion's The Power of Creative Destruction, co-authored, for a more in-depth look at the theories and history for which this year's Nobels are being recognised.

Editor’s Note:

The citation of the 2025 Sveriges Riksbank Prize in Economic Sciences to Joel Mokyr, Philippe Aghion, and Peter Howitt is not so much an acknowledgement of scholarly distinction; it is a welcome validation of the part that innovation, historical knowledge, and institutional construction will play in mapping out our economic destiny. Mokyr's book is a reminder that technological advancement is not a given but rather nurtured through cultural receptiveness, intellectual communication, and institutional encouragement. His historical perspective presents a persuasive account of why certain societies are successful while others fail. In a time when knowledge is widespread but institutional trust is weak, this vision is more timely than ever.  Aghion and Howitt's creative destruction theory, on the other hand, offers a strict discipline for making sense of the disruptive power of innovation. Their model has no problem confronting the uncomfortable reality: development tends to displace the known. But it also holds out a promise, demonstrating how competition and renewal can deliver sustained expansion, higher living standards, and wider prosperity, if societies invest in education, flexibility, and progressive policy. The Nobel Prize this year delivers a crucial message. It encourages policymakers, teachers, and economists to understand that long-term growth is not a happenstance but a purposeful creation. It should be fostered by intentional design, strategic vision, and an openness to adapt and transform.

Skoobuzz believes that as Professor Charles van Marrewijk reflects on these contributions at Utrecht University, the academic community has an opportunity not only to acknowledge these ideas but also to apply them thoughtfully, critically, and with purpose. The intellectual groundwork has been laid by the laureates; it is now our responsibility to build upon it.

FAQs

1. Who won the 2025 Nobel Prize in Economics, and what was their contribution?

Joel Mokyr, Philippe Aghion, and Peter Howitt received the Nobel Prize in Economic Sciences for their research on technological progress and creative destruction as drivers of sustained economic growth.

2. What is the significance of the Utrecht University Nobel Lecture in 2025?

The Utrecht University Nobel Lecture offers academic reflection on the Nobel Laureates’ work, connecting global economic trends to current research in innovation, growth theory, and policy design.

3. How does creative destruction explain long-term economic growth? 

Creative destruction is the process by which new technologies replace outdated ones, leading to productivity gains, industry transformation, and improved living standards, central to Aghion and Howitt’s growth model.

4. What role does Joel Mokyr’s research play in understanding economic innovation?

Mokyr’s work links cultural attitudes and institutional frameworks to technological change, showing how knowledge-sharing and openness to ideas triggered historical periods of sustained growth.

5. How is Utrecht University contributing to global economic research in 2025? 

Through events like the Nobel lecture series and its School of Economics, Utrecht University fosters academic dialogue on economic innovation, policy, and the historical foundations of growth.

6. Why is the Nobel Prize in Economic Sciences important for today’s global challenges?

The prize highlights research that helps societies navigate digitalisation, climate innovation, and AI-driven productivity by understanding how to build inclusive and resilient economic systems.

7. What topics are covered in university-hosted Nobel lectures like the one at Utrecht?

Topics include technological change, economic history, growth theory, policy implications, and reflections on how Nobel-winning research applies to current global economic trends.