The 2025 Nobel Prize in Economics Recognizes Foundational Work on the Role of Technological Progress in Economic Development

The 2025 Nobel Prize in Economics, officially known as the Sveriges Riksbank Prize in Economic Sciences, was awarded on Monday, October 13, 2025, to Joel Mokyr, Philippe Aghion, and Peter Howitt for their work on economic growth based on technological innovation.

Half of the prize goes to Joel Mokyr, a 79-year-old Dutch-born American-Israeli economist and professor at Northwestern University in the United States. He is recognized for highlighting the historical and institutional conditions that foster sustainable growth through technological progress. His research, at the intersection of economic history and growth theory, has shown how cultural, scientific, and institutional factors such as the valuing of knowledge, the dissemination of ideas, and the freedom to experiment paved the way for major industrial revolutions. By tracing the role of institutions in creating a climate conducive to innovation, Mokyr has helped explain why some societies have experienced sustained economic development while others have lagged.

The other half of the prize is shared between Philippe Aghion, a 69-year-old French economist, and Peter Howitt, a 79-year-old Canadian economist, for their theory of growth through creative destruction: a process where innovations replace older technologies, thereby stimulating economic progress while rendering previous products obsolete. Their model, now central to the theory of endogenous growth, highlights the pivotal role of research, competition, and entrepreneurship in economic development. Aghion and Howitt demonstrate that a nation's prosperity depends on its ability to encourage experimentation and adapt to change. Their approach also illuminates the public policies needed to support innovation, including investment in education, protection of intellectual property rights, and the establishment of institutions capable of fostering dynamic competition without hindering creativity.

The Nobel Committee emphasized that this work underscores the importance of not taking technological progress for granted, but rather preserving conditions conducive to innovation, such as a society open to change. It stressed that economic growth relies on a fragile balance between creativity, education, and robust institutions. A society that neglects these foundations risks seeing its innovation dynamic wane and losing competitiveness. According to the Committee members, the laureates' research constitutes a call for vigilance and action. Because, in a rapidly changing world, only an economy capable of encouraging research, risk-taking, and the dissemination of knowledge will be able to maintain sustainable and inclusive growth.

An Invitation to Invest in Quality Education

In his reaction, Philippe Aghion called on European countries to strengthen their innovation capacity so as not to let the United States and China dominate cutting-edge technologies. According to him, Europe suffers from a technological lag due to the absence of suitable policies and institutions to support disruptive innovations. He emphasized the need for European states to focus more on fundamental research, stimulate private investment in innovative sectors, and foster a culture of risk-taking. Aghion also advocated for better coordination of industrial policies across the continent, to create an environment conducive to the emergence of technological champions capable of competing with American and Asian giants. For him, only a Europe that invests in knowledge and creativity will be able to regain a path of sustained and inclusive growth.