The 2025 Nobel Prize in Economic Sciences was awarded to Philippe Aghion, Peter Howitt, and Joel Mokyr for explaining how innovation drives long-term economic growth. Their work shows how societies move from economic stagnation to sustained progress through continuous technological renewal.
For centuries, people lived with little change in living standards. The Industrial Revolution in Britain changed this by linking science to technology and creating an endless cycle of innovation. Growth became the “new normal,” leading to better health, longer lives, and rising incomes.
Aghion and Howitt described growth as a process of creative destruction — where new ideas replace old ones.
Globally: The shift from steam engines to electricity, from typewriters to computers, and from physical stores to e-commerce transformed industries and created millions of new jobs while ending others.
In India:
Creative destruction is “creative” because it builds new opportunities, but “destructive” because it ends outdated ones. Yet this churn keeps the economy dynamic and innovative.
The laureates emphasize that governments and institutions must manage this change wisely:
For India, the next wave of creative destruction will be driven by Artificial Intelligence (AI):
Like the steam engine in the 18th century, AI today connects science with practice, multiplying innovation possibilities.
The Nobel laureates teach that economic progress is not automatic — it depends on societies that welcome change. When innovation is continuous, supported by good policy and social openness, growth becomes sustainable. India’s success in digital transformation and AI shows that creative destruction remains the true engine of prosperity.
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