Introduction to SUAR:

The announcement of the Swedish Academy's Sverges Riksbank Prize for Economic Sciences or more familiarly called the Nobel Prize in Economics on Monday, October 13, 2025 for Joel Mokyr, Philippe Aghion, and Peter Howitt confirms the strategic value of innovation for economic growth. As the engine of growth, businesses are encouraged to make innovation an important part of their business processes.

Joel Mokyr (b. 1946) is a professor at Northwestern University, Illinois, USA, and the Eitan Berglas School of Economics, Tel Aviv University, Israel. He received his PhD from Yale University in 1974, and published the book The Lever of Riches: Technological Creativity and Economic Progress in 1990.

Philippe Aghion (b. 1956) is a professor at the College de France, INSEAD, Paris, France, and the London School of Economics and Political Science, UK. He earned his PhD from Harvard University in 1987.

Together with Peter Howitt (b. 1946), a professor at Brown University, he created a mathematical model of "creative destruction", which is the mechanism by which new products resulting from innovation will defeat companies selling old products. Innovation is novel and creative, but at the same time it defeats unchanging firms.

SUAR editors had the opportunity to interview the Chairman of the 2025 Nobel Prize Economics Committee and Professor of International Economics at Stockholm University John Hassler via written correspondence via email. The following is John Hassler's full interview with SUAR reporter Chris Wibisana.

Professor Hassler, thank you for taking the time to answer this email. As Chairman of the Committee for the Nobel Prize in Economics, is there any historical background to this year's award?

For most of the history of human civilization, you know, the standard of living hasn't changed significantly from one generation to the next. Occasionally, there are important technological discoveries that drive a spark of growth. However, more often than not, these important discoveries lose momentum within a short period of time and fade away. As a result, civilizations back then considered stagnation to be normal.

Then, the industrial revolution changed all that?

You are right. Over the past 200 years or so, the civilization's past has undergone massive changes and has been very different. This is because the industrial revolution and continuous technological innovation have created sustained economic growth. Improvements have been made at a rapid pace by one invention after another. This fast pace has replaced the stagnation that was previously considered normal.

What are the improvements you mentioned?

It's all around us. New concoctions of medicines, safer vehicles, better food processing, more efficient ways to heat and light homes, the internet, and the opportunity to communicate with people as far apart as this correspondence. These are just a few of the dimensions of economic growth that result from technological innovation.

To what extent have these aspects been uncovered by this year's Nobel Prize winners?

This year's Nobel Prize winners comprehensively explain the impact of innovation on economic growth. Through their academic work, they reveal how technological innovation has fundamentally altered the course of human civilization over the past two centuries. The committee believes that the winners' works have changed an important aspect of human civilization: change, not stagnation, is the norm we must accept.

How do these innovations impact the business world?

Good question. The work of this year's Nobel Prize winners has seen science, technology and entrepreneurial activity become interconnected, rather than separate and siloed as in the past. The interconnectedness of the three components has also proven to be mutually reinforcing, and mutually encouraging. This was first proven in the UK, and then continued successfully around the world.

In addition, are there any important aspects that the business world should pay attention to?

The work of this year's Nobel Prize winners underscores the important role that innovative businesses play in economic growth. Without innovation from businesses, stagnation will return to normal. The winners' works also demonstrate the importance of society's openness to the changes that come from innovation.

Does the change require systemic support, such as from the state?

Of course. A system that can help overcome resistance to change is needed, and people who are left behind in the process of rapid change need assistance to find new ways to participate in improving community productivity.

However, the system must also guard and protect against overly large companies, as they may have an interest in blocking new and better innovations from new entrepreneurs who are still paving their way.