By AFP
October 13, 2025
Aghion said Europe has lagged behind the United States in terms of wealth due to its failure to implement high-tech innovations - Copyright AFP Brendan Smialowski
One of the winners of this year’s Nobel economics prize, France’s Philippe Aghion, on Monday warned Europe that it must not let the United States and China dominate technological innovation.
Aghion shared the Nobel with American-Israeli Joel Mokyr and Canada’s Peter Howitt for work on technology’s impact on sustained economic growth.
“I think European countries have to realise that we should no longer let (the) US and China become technological leaders and lose to them,” Aghion told reporters by phone during a press conference in Stockholm announcing this year’s winners.
He said the wealth gap had widened between the US and the eurozone since the 1980s.
After a period when Europe caught up to the US “in per capita GDP terms between World War II and the mid-80s”, the gap has again widened.
“The big reason is that we failed to implement breakthrough, high-tech innovations,” he said.
“We remained circumscribed to mid-tech incremental, and that’s very much in relation with the Draghi report. We are missing proper policies and institutions to innovate breakthrough high-tech,” he said.
Mario Draghi, the former head of the European Central Bank, published a seminal report last year with a series of proposals to kickstart the EU economy, including annual investment of at least 750-800 billion euros.
“We don’t have a proper financial ecosystem of innovation,” Aghion said.
Aghion, 69, and Howitt, 79, shared one half of the Nobel prize for their theory of sustained growth through “creative destruction”, which occurs when a new and better product enters the market and edges out the companies selling the older products.
Mokyr, a professor at Northwestern University in the United States, meanwhile won the other half for using “historical sources as one means to uncover the causes of sustained growth becoming the new normal,” the Academy said.
The Nobel economics prize consists of a diploma, a gold medal and a $1.2 million cheque.
Nobel economist warns of AI dangers
By AFP
October 13, 2025
Members of the Swedish Academy of Sciences announce the Nobel economics prize winners, including Peter Howitt (R) - Copyright TT NEWS AGENCY/AFP Anders WIKLUND
A winner of this year’s Nobel prize in economics warned Monday that artificial intelligence offers “amazing possibilities” but should be regulated because of its job-destroying potential.
The remarks from Canadian Peter Howitt, professor emeritus at Brown University in the United States, came amid growing concerns about how AI will impact society and the labor market.
California Governor Gavin Newsom on Monday signed a first-of-its-kind law regulating interactions with AI chatbots, defying a push from the White House to leave the technology unchecked.
Howitt was one of three economists honored Monday by the Royal Swedish Academy of Sciences for work on how technology drives and affects growth.
His research with fellow winner Philippe Aghion of France focused on the theory of “creative destruction” in which a new and better product enters the market, and the companies selling the older products lose out.
Howitt told a news conference that it remains to be seen who will be the leader in AI, and “we don’t know what the creative destruction effects are going to be.”
“It’s obviously a fantastic technology that has amazing possibilities. And it also obviously has an amazing potential for destroying other jobs or replacing highly skilled labor. And all I can say is that this is a conflict. It’s going to have to be regulated,” he said.
“Private incentives in an unregulated market are not really going to resolve this conflict in a way that’s best for society, and we don’t know what’s going to come from it.”
Howitt, 79, said it was a “big moment in human history” and likened it to past periods of technological innovation, including the telecoms boom of the 1990s, and the dawns of electricity and steam power.
He said those innovations all demonstrated how technology can enhance and not just replace labor. “How we’re going to do it this time? I wish I had specific answers, but I don’t,” he added.
Howitt said that when he and Aghion first wrote their seminal 1992 paper on creative destruction it took five years to get it published, but his collaborator knew they were on to something special.
“Right from the beginning, from our very first research, I remember back in 1987, Philippe saying we’re going to get a Nobel Prize for this. I said, ‘Sure, sure, sure,'” Howitt recalled.
“He said, ‘Our time will come. Our time will come,’ okay, and now it’s come. Amazing.”
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