The 2025 Nobel Prize in Economics was awarded for the “explanation of innovation-driven economic growth.” Dutch historian Joel Mokyr received half of the prize “for identifying the prerequisites for sustained growth through technological progress.” The remaining half was awarded to French economist Philippe Aghion and Canadian economist Peter Howitt for their 1992 article in Econometrica, which formulated the “theory of sustained growth through creative destruction.”
This research addresses the fundamental process underlying global prosperity. Despite vast regional disparities, all parts of the world, including the poorest, have experienced remarkable improvements in living conditions that would have been inconceivable only a few decades ago. These achievements are undeniable, yet they are often questioned or minimized. The world has undergone continuous and accelerated development for the past 250 years, but satisfaction and well-being have not increased accordingly. Humanity lives in ways unimaginable to previous generations, yet happiness has not necessarily followed. Progress, while evident, often carries with it a sense of unease.
The authors draw attention to the paradoxical and sometimes harsh nature of this process, encapsulated in the expression “creative destruction.” The concept, initially suggested by Karl Marx and Werner Sombart, was later formalized by Joseph Schumpeter in his 1942 seminal work Capitalism, Socialism and Democracy, particularly in Chapter VII, entitled “The Process of Creative Destruction.” The core insight lies in recognizing the inherent contradiction of technological progress, which is simultaneously constructive and destructive. Modernization, before generating benefits, dismantles existing modes of life and economic organization.
Mokyr’s research aims primarily to identify the historical conditions that, after millennia of technological advances, enabled the emergence of self-sustaining development in the mid-eighteenth century. In this process, he also highlights the persistent resistance to innovation, referring to what he terms “Technological Inertia in Economic History” (The Journal of Economic History, June 1992). Societies often resist change, whether due to entrenched interests or ideological objections to novelty. The conflict between established enterprises and innovative forces constitutes the central mechanism modeled by Aghion and Howitt.
The contemporary relevance of this theme is evident. Beyond its historical and theoretical contributions, this body of research provides valuable insight into current social and economic transformations. The dynamics of innovation, particularly technological innovation, dominate modern societies to an unprecedented degree. Humanity is immersed in a constant flow of algorithms, mechanisms, and therapeutic breakthroughs. As Mokyr observes, “the Industrial Revolution was the mother of all creative destructions,” yet it may be said that the present era represents the most profound and far-reaching phase of technological advancement in history. From computing to energy, finance to geopolitics, and medicine, individuals are confronted daily with revolutionary and transformative developments.
Nevertheless, despite these advances, the prevailing social atmosphere in the most developed nations is characterized less by gratitude than by discontent. Social unrest, polarization, and extremism are intensifying, and symptoms of fear and frustration are widespread. It may thus be argued that the defining force of the present period is not progress itself, but the dislocation it entails. In the phrase “creative destruction,” the emphasis falls on destruction, while creation appears only as its modifier.
The most complex aspect to comprehend, as in every historical period, is contradiction. There is no shortage of advocates of relentless innovation or of those who oppose change entirely. The challenge for contemporary leaders, as for their predecessors, is to reconcile these opposing forces: to foster progress while simultaneously protecting and supporting those who are displaced or marginalized by it.