2025 Nobel Prize in Economics: the importance of innovation as a tool for economic growth and social development

The 2025 Nobel Prize in Economics has been awarded to Joel Mokyr, Philippe Aghion and Peter Howitt. The award was given, as stated in the citation, “for explaining innovation-driven economic growth”.
In particular, Mokyr was credited with “identifying the prerequisites for sustained growth through technological progress”, while Aghion and Howitt were awarded “for the theory of sustained growth through creative destruction”.

We asked Alessandro Nuvolari, Vice-Rector for Research at the Sant'Anna School of Advanced Studies and full professor of Economic History, and Andrea Roventini, Director of the Institute of Economics and full professor of Political Economy, for their comments on the awarding of the Nobel Prize. In particular, Nuvolari focused on Joel Mokyr's contribution to economic history studies and their impact on today's society, while Roventini analysed the importance of Aghion and Howitt's research and how their models demonstrate that economic growth is closely linked to innovation and technological progress.

Interview with Alessandro Nuvolari

Professor Nuvolari, what are your thoughts on the decision to award the Nobel Prize to Mokyr?
"I was personally pleased with the decision. It seems that the Academy of Sciences is increasingly recognising the fundamental importance of economic history within the economic sciences. From 2022 to the present, the Nobel Prize has been awarded to economists who have engaged intensively with historical research, and, in my opinion, Claudia Goldin's work can be considered economic history in its own right. In the case of Joel Mokyr, it is explicitly a recognition given to an “official member” of the scientific community of economic historians, which further reinforces the signal of the growing importance of economic history in contemporary economic research.
Another consideration can be made. The theme of this year's prize is growth and innovation. From this point of view, one could say that this is a Nobel Prize awarded with considerable delay and that, unfortunately, this delay has made it impossible to recognise the contribution of the “founding fathers” of modern innovation economics, such as Chris Freeman, Dick Nelson and Nate Rosenberg. It is often said that “better late than never”, but in this case the delay is almost unforgivable.

How significant do you consider the contribution of the award-winning economists to economic thought to be, and what could the implications be for today's society?

"I will limit myself here to commenting on the contribution of Joel Mokyr. In his work, Mokyr has highlighted the historical role of the Enlightenment in promoting modern economic growth and contributing to the improvement of living standards for the world's population. While focusing particularly on the economic impact of the Enlightenment, he has emphasised the importance of Enlightenment values — in particular, open society, trust in knowledge and tolerance. One of the most significant lessons to be drawn from his work is the need to pursue inclusive development paths, which must, however, be firmly rooted in the Enlightenment Project which, despite its limitations, continues to represent the best blueprint for contemporary societies.

Are there any similarities between Mokyr's research and that conducted at the Institute of Economics?

The theme of innovation — including the economic history of innovation — is one of the main areas of research at the Institute of Economics. Joel Mokyr has often cited my work, as well as that of other economists at the Institute. In my research, I have repeatedly engaged with his interpretation of the Industrial Revolution, and I believe that this intellectual dialogue will continue in the future.
The recent FIS WORKNOW project, won by Raffaele Danna, also fits into this perspective. It aims to study the emergence of a new dynamic of “practical” knowledge in Europe since the late Middle Ages. In fact, this project is fully in line with the research agenda outlined by Joel Mokyr in his book The Gifts of Athena."

Interview with Andrea Roventini

Professor Roventini, what are your thoughts on the decision to award the Nobel Prize to Aghion and Howitt?

"It is an expected decision given the significant contribution of the two economists to the theory of economic growth. In particular, Aghion and Howitt have developed theoretical models that link innovation and technical progress in businesses to the economic growth of countries. Personally, I am happy for Peter Howitt, a friend who has come to the Sant'Anna School several times to teach on the PhD in Economics programme at the Institute of Economics."

How significant do you consider the contribution of the award-winning economists to economic thought and what could be the implications for today's society?

"Aghion and Howitt's research is rooted in Schumpeterian thinking on innovation and economic growth. Their models show that innovation and technological progress are the basis of economic growth. But at the same time, innovation leads to phenomena of creative destruction that threaten the competitive advantages of companies and countries and offer new growth opportunities for newcomers. A striking example is the opportunities offered by the decarbonisation of the economy, where Chinese companies have been able to seize the advantages of green innovation to increase their competitiveness, challenge US and EU companies in existing markets, and open up new markets. The crisis in the European automotive industry is a classic example of Schumpeterian competition. The economic policy implications are clear: public policies are needed to support research and innovation, as well as industrial policies. Returning to the previous example, China's successes stem from a set of industrial and innovation policies that have been designed and supported for decades; the European Union should follow this strategy, but unfortunately, despite its proclamations, it does not allocate the necessary resources and prefers to focus on the arms industry. Finally, in the face of Schumpeterian competition, the EU and European car manufacturers must focus decisively on electric cars and associated supply chains in order to close the technological gap with Chinese companies; postponing the ban on the sale of internal combustion engines until after 2025 will only prolong the agony of the automotive sector, with serious risks for the survival of European companies and for employment".

Are there any similarities between Aghion and Howitt's research and the activities carried out at the Institute of Economics?

"Innovation, technological progress and economic growth have always been at the heart of the Institute of Economics' research since its foundation. Giovanni Dosi is one of the world's leading scholars of innovation and evolutionary economics. Giovanni has published many papers on the influence of innovation on competitiveness and strategic choices of companies, on industrial dynamics, on the economic growth of countries and on the necessary industrial policies. More generally, the contributions of Aghion and Howitt are part of an already established line of research in the economics of innovation, to which Chris Freeman, Dick Nelson, Sidney Winter and Giovanni Dosi have made fundamental contributions. It is a pity that once again the Nobel Prizes in Economics have been awarded only to mainstream scholars, ignoring those who have made fundamental contributions to the study of innovation and technological change."