Trio win Nobel in economics for work on tech-driven growth

Joel Mokyr, Philippe Aghion and Peter Howitt won the 2025 Nobel economics prize on Monday for their work on how innovation and the forces of "creative destruction" can drive economic growth and lift living standards across the globe.

Creative destruction is a key concept in economics that refers to the process in which beneficial new innovations replace — and thus destroy — older technologies and businesses.

Their research explains how technology gives rise to new products and production methods which replace old ones, resulting in a better standard of living, health and quality of life.

"Over the last two centuries, for the first time in history, the world has seen sustained economic growth. This has lifted vast numbers of people out of poverty and laid the foundation of our prosperity," the Royal Swedish Academy of Sciences, which awards the prize, said in a statement.

The laureates have also shown that such progress cannot be taken for granted, the academy said, while two of the prize winners highlighted that US President Donald Trump's trade policies would impinge on growth.

The prestigious award, formally known as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, is the final prize to be given out this year and is worth $1.2 million.

Mokyr, a professor at Northwestern University in the US, was awarded half the prize. Aghion, a professor at the College de France and INSEAD in Paris and at the London School of Economics and Political Science, and Howitt, a professor at Brown University in the US, shared the other half.

The award comes at a potential inflexion point for the global economy with many expecting artificial intelligence to spark a new growth spurt. It also highlights the strategic risks for Europe of falling further behind the US and China on technologies of the future as well as the potential costs of barriers to global trade.

Aghion said de-globalisation and tariff barriers were "obstacles to growth" adding that the bigger the market the more possibilities to exchange ideas, transfer technologies and for healthy competition.

"Anything that gets in the way of openness is an obstacle to growth. So I see there kind of dark clouds currently accumulating, pushing for barriers to trade and openness," he said.

Howitt, who said he had been "absolutely stunned" by the award, was also critical of President Trump's trade policies.

"It's pretty clear that these are going to discourage innovation by reducing what we call the scale effect, he said. "Starting a tariff war just reduces the size of the market for everybody."

He said trying to bring manufacturing jobs back to the US could perhaps make some political sense but was not good economic policy.

"We're good at designing running shoes, but it's best for us to leave others to make them," he said. -- Reuters