Three economists—Joel Mokyr, Philippe Aghion, and Peter Howitt—were awarded the 2025 Nobel Memorial Prize in Economic Sciences for research linking technological progress to long-term economic growth. Their work underscores that prosperity depends on a society’s openness to innovation and its ability to manage the disruptions it creates.
The Royal Swedish Academy of Sciences credited the trio for showing how new technologies, when supported by scientific understanding and social acceptance, transform living standards across generations. Mokyr, of Northwestern University and Tel Aviv University, was recognized for tracing how the modern economy emerged from a cultural shift that valued scientific reasoning and experimentation. His work argues that progress became self-sustaining only once people began to understand why new inventions worked, not merely that they did.
Aghion, of Collège de France and the London School of Economics, and Howitt, of Brown University, shared the other half of the prize for their theory of “creative destruction.” Building on Joseph Schumpeter’s earlier ideas, they modeled how innovation simultaneously drives growth and disrupts existing industries. Each new wave of technology replaces outdated ones—rotary phones give way to smartphones—while producing both winners and losers in the economy.
This year’s award arrives at a moment when the world’s next technological revolution, artificial intelligence, is reshaping industries. Yet the laureates cautioned that protectionism, tariffs, and immigration limits threaten the very mechanisms that foster innovation. They pointed to policies in the United States and China that risk fragmenting global markets and curbing the exchange of ideas.
Mokyr warned that governments must prioritize science and education if they want innovation to continue addressing challenges such as climate change and aging populations. Aghion emphasized that openness—across borders, markets, and minds—remains the essential ingredient for growth. “Trade barriers and deglobalization make markets more fragmented and reduce opportunities to exchange ideas,” he noted.
Their combined message is both hopeful and cautionary: technological progress can sustain human prosperity, but only if societies resist the urge to close themselves off. As Aghion put it, the “dark clouds” ahead will test whether nations choose to protect existing industries or invest in the discoveries that drive the next century of growth.