Core Viewpoint - The 2025 Nobel Prize in Economic Sciences was awarded to three scholars who highlighted the critical role of technological and scientific innovation in driving economic growth, emphasizing the importance of continuous investment in basic research for long-term economic advancement [2][5][3]. Group 1: Nobel Prize Winners and Their Contributions - The prize was shared equally between Joel Mokyr, Philippe Aghion, and Peter Howitt, who revealed how technology and scientific innovation interact with market competition to foster economic growth [5][7]. - Joel Mokyr's research demonstrated the self-reinforcing relationship between scientific breakthroughs and technological applications, which is essential for sustained economic growth [7][11]. - Aghion and Howitt developed a pioneering mathematical model in the 1990s that explains how firms improve production processes and introduce higher-quality products through R&D investments, ultimately replacing established market leaders [8][30]. Group 2: Historical Context and Economic Growth - Historically, economic growth was sporadic, with little change in living standards until the Industrial Revolution in the 18th century, which initiated a self-reinforcing cycle of innovation and economic growth [21][22]. - Over the past two centuries, many countries have maintained an average economic growth rate of about 2%, which, due to compounding effects, results in significant income increases over decades [23][25]. - Joseph Schumpeter's concept of "creative destruction" explains that economic progress is driven by innovation that disrupts existing industries and creates new growth opportunities [26][28]. Group 3: Mechanisms of Innovation and Economic Dynamics - Mokyr identified two types of "useful knowledge" that drive innovation: propositional knowledge (understanding natural laws) and normative knowledge (practical guidelines) [30][29]. - Aghion and Howitt's model illustrates that the continuous replacement of old firms with new ones is a key engine of economic growth, as new companies strive to innovate and outperform established players [34][36]. - The rise of AI is currently instigating another wave of creative destruction, reinforcing the relevance of the Nobel laureates' research [40][41]. Group 4: Implications of Innovation - Innovation leads to the emergence of new winners while potentially sidelining others, raising concerns about job displacement and inequality [41][42]. - A robust policy framework is necessary to manage the effects of innovation and prevent market failures, ensuring that the mechanisms behind creative destruction are maintained [43][44].