The 2025 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel went to Joel Mokyr, Philippe Aghion and Peter Howitt for explaining how innovation can drive sustained economic growth. Mokyr received half the prize; Aghion and Howitt shared the other half. Their work approaches the question from different angles: Mokyr examined the historical conditions that let technological progress continue, while Aghion and Howitt modeled how new ideas can replace older products and businesses.
Why did Joel Mokyr, Philippe Aghion and Peter Howitt win?
The Royal Swedish Academy of Sciences announced the award on 13 October 2025, citing the laureates “for having explained innovation-driven economic growth.” The prize amount was 11 million Swedish kronor, divided equally between Mokyr and the joint laureates Aghion and Howitt. The Academy’s announcement describes the award and its division.
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This is the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, commonly called the economics prize. It is not one of the original prize categories established in Alfred Nobel’s will.
What each laureate contributed
| Laureate(s) | Approach | Central question and contribution |
|---|---|---|
| Joel Mokyr | Economic history | What made technological progress sustained rather than sporadic? Mokyr emphasized the accumulation of useful knowledge, the interaction between scientific understanding and practical technology, and social openness to new ideas and change. |
| Philippe Aghion and Peter Howitt | Mathematical growth theory | How can innovation generate ongoing growth? Their theory explains how competition and new products or methods can displace older ones, a process known as creative destruction. |
The Academy’s scientific background presents these contributions as complementary: Mokyr helps explain the conditions that allow progress to persist, while Aghion and Howitt explain a mechanism through which innovation can produce growth.
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What is creative destruction?
Creative destruction is the churn in which an innovation creates a better product or production method while weakening or displacing an older product, technology or incumbent firm. It is “creative” because something new is introduced and “destructive” because an established way of doing business loses its advantage.
Aghion and Howitt’s mathematical model of this process was published in 1992. In the Academy’s account, a better new product can cause firms selling older products to lose out. That prospect can create resistance: companies and interest groups that expect to be harmed by change may try to block innovation. The Academy’s popular explanation describes this tension.
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Does innovation make everyone better off?
The prize recognizes an explanation of economic growth, not a claim that every innovation benefits every worker, company or community. Creative destruction involves losses as well as new opportunities, and the Academy’s account does not say that transitions are painless or that gains are shared equally. Its focus is the aggregate growth mechanism and the conflicts that can arise when innovation disrupts established interests.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What the award says about economic growth
The shared message is that sustained growth depends on technological change, but progress is not automatic. Mokyr’s historical work highlights conditions that help new knowledge accumulate and spread; Aghion and Howitt’s theory shows how competition and the replacement of old products can turn innovation into a continuing source of growth. As John Hassler, chair of the Committee for the Prize in Economic Sciences, said in the Academy’s announcement: “The laureates’ work shows that economic growth cannot be taken for granted. We must uphold the mechanisms that underly creative destruction, so that we do not fall back into stagnation,”
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