The Nobel Prize in Economics was awarded to explain “innovation-led” growth.

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The 2025 Nobel Prize in Economics was awarded to Joel Mokyr, Philip Aghion and Peter Hewitt for their work explaining how innovation can drive sustainable economic growth.

Mokyr, an economic historian at Northwestern University in the US, won half the prize for his work explaining why growth only took off in a sustainable way from the Enlightenment onwards. In previous centuries, although there were many societies that achieved breakthrough innovations, the spurts of economic growth were short-lived.

By focusing on the impact of technological change, Mokyr identified three basic requirements for sustainable growth: joint development of science and technology, so that people understand why things work; Mechanical efficiency and a society open to potentially disruptive change.

Aghion, a professor at the College of France, INSEAD in France, and the London School of Economics in Britain, and Hewitt, from Brown University in the United States, won the other half of the prize.

The Prize Committee in Economic Sciences said they were honored for developing their theory of “sustainable growth through creative destruction.” The duo published a major paper in 1992 on building a mathematical model of how companies invest in new processes and products, outperforming their predecessors.

The committee noted that their model is directly relevant to economic policy making, because it can be used to calibrate subsidies for research and development and improve safety nets for workers who might lose their jobs as a result of technological change.

“Over time, this process has radically changed our societies – over the course of a century or two, almost everything has changed,” the committee said, pointing to the development of telephones as an example.

The committee said the laureates’ work also showed that “we must be aware of, and address, threats to continued growth” — which can come from a few companies allowed to dominate the market, from restrictions on academic freedom, or from interest groups that prevent change.

In a press interview following the announcement, Aghion said that there are now “dark clouds accumulating” over the global economy, as governments raise new barriers to trade and openness, and struggle to reconcile economic growth with the needs of the environment.

He also drew attention to the widening gap between the technological leadership of the United States and China and the “cumulative” innovations witnessed in the euro area, because it has not yet found the necessary ways to pursue an effective industrial policy while continuing to encourage competition.

Established in 1968, the Nobel Prize in Economics is awarded by the Royal Swedish Academy of Sciences in Stockholm, and is officially known as the Sveriges Riksbank Prize in Economic Sciences in memory of Alfred Nobel.

On Friday, the Nobel Peace Prize was awarded to Maria Corina Machado, Leader of the main opposition in Venezuela, dashing the hopes of US President Donald Trump.

The Nobel Prizes were also announced last week chemistry, Literature, drug and Physics. Each prize is worth 11 million Swedish krona ($1.17 million).