Three Nobel Prizes And Three Books Appreciate Creative Destruction
To support innovation as the lifeblood of progress and the engine of growth, institutions must be designed to accommodate innovation, rather than obstruct it.
Joseph Schumpeter is having a heyday. In 1942, he coined the term “creative destruction” to describe the process by which new innovations render old technologies and business models obsolete, fueling productivity, long-term economic growth and prosperity by reallocating resources to more efficient uses.
This year, the Nobel Committee awarded the Prize in Economic Sciences to three economists—Joel Mokyr, Philippe Aghion, and Peter Howitt—for their work on innovation-driven economic growth.
Mokyr’s historical research shows that technological progress is the key driver of sustained growth, while Aghion and Howitt’s models explain how innovation disrupts existing structures, reallocates resources, and fuels long-term prosperity.
Joseph Schumpeter coined the term “creative destruction” to describe the process by which new innovations render old technologies and business models obsolete.
Author's summary: Nobel Prizes awarded for innovation-driven economic growth research.