Nobel 2025: Creative Destruction - the Engine for Sustainable Growth

For their research on how new technologies can promote sustainable growth and innovation that drives further progress, Professor Joel Mokyr at Northwestern University (USA), Professor Peter Howitt at Brown University (USA) and Professor Philippe Aghion at Collège de France and INSEAD (France) and the London School of Economics and Political Science (UK) have been honored with the 2025 Nobel Prize in Economics by the Royal Swedish Academy of Sciences.

Over the past two centuries, for the first time in history, the world has witnessed sustained economic growth, lifting large numbers of people out of poverty and laying the foundations for prosperity.

Technology has developed rapidly and affected everyone with the emergence of new products and new production methods, thereby gradually replacing old products and production methods like a spiral without end.

This is the basis for sustainable economic development, helping to bring better living standards, health and higher quality of life to people around the world.

However, this is not always the case. Stagnation has always been present in the history of human development and although important discoveries have partly improved living conditions and brought higher incomes, growth has ultimately remained flat.

In his research, Professor Joel Mokyr - born in 1946 in Leiden (Netherlands) - used historical sources to explore the reasons why sustainable growth became the new norm.

He demonstrates that if innovation is to continue, we need not only to know which innovations are effective, but also to understand their mechanisms through appropriate scientific explanations. Before the industrial revolution, these scientific explanations were often absent, making it difficult to generate growth based on new inventions and discoveries.

In addition, Professor Joel Mokyr also emphasized the importance of openness in society to new ideas and acceptance of possible changes.

Meanwhile, in the research work of Professor Philippe Aghion (born in 1956 in Paris, France) and Professor Peter Howitt (born in 1946 in Canada), the two authors also studied the mechanisms that create sustainable growth.

In a 1992 paper, two professors developed a mathematical model for “creative destruction”: that is, as new and better products enter the market, older products are gradually replaced. Innovation represents something new and creative, but it also means that the old are buried, and companies with outdated technology are driven out of the game.

Thus, it can be seen that in different ways, the three economists above all show that creative destruction creates conflicts that need to be managed constructively, because otherwise, innovation will be hindered by companies and interest groups already operating in the market when they realize that they are being pushed into a disadvantage by the new thing.

“The work of this year’s laureates shows that economic growth should not be taken for granted,” said John Hassler, chairman of the Economic Sciences Prize Committee. “We need to maintain the mechanisms that underpin creative destruction to avoid stagnation.”

Unlike the five traditional prizes named by Alfred Nobel in his will, the Nobel Prize in Economics was established in 1968 by the Swedish Central Bank “in memory of Alfred Nobel.”

The 2025 Nobel Prize in Economics winners will receive a gold medal, a certificate and a prize money of 11 million Swedish kronor (about 1.2 million euros).

Half of the prize money will be shared with Professor Joel Mokyr for "identifying the prerequisites for sustainable growth through technological progress" and the other half will be shared between Professors Philippe Aghion and Peter Howitt for "theorizing sustainable growth through creative destruction"./.

(TTXVN/Vietnam+)

Source: https://www.vietnamplus.vn/nobel-2025-pha-huy-mang-tinh-sang-tao-dong-luc-cho-su-tang-truong-ben-vung-post1070074.vnp