This year’s Nobel Prize in Economic Sciences was awarded to Joel Mokyr, Philippe Aghion, and Peter Howitt for their work demonstrating “how new technology can drive sustained growth.” Taking it as a recommendation, I decided to explore the subject further and picked up “The Power of Creative Destruction Economic Upheaval and the Wealth of Nations” by Aghion, Antonin, and Bunel (2021).

The book thoroughly explains the concept of economic growth driven by innovation, or what authors refer to as creative destruction. Throughout the text, the authors - who clearly possess strong teaching skills - repeatedly emphasize the essential ingredients for fostering innovation: the diffusion of knowledge, the creation of incentives, the protection of property rights, and the process of creative destruction itself. They meticulously break down each of these requirements, providing a step-by-step overview of what is necessary to achieve sustainable growth.

As with many economic issues, the path to growth by innovation is not straightforward. Questions arise, such as whether increased competition always fosters innovation, or if there is a need for balance depending on the type of enterprise. The same complexities apply to topics like taxation, health, happiness and so on. Nevertheless, the book stands out for its clarity and organization. It is easy to read and well-structured, with chapters well illustrated by graphs, data, and practical examples. Each chapter concludes with a summary section that reinforces the key points, contributing to the overall clarity.

While this organization helps to comprehend the topic, it can also make the reading experience feel somewhat repetitive and, at times, a bit dry. I felt sometimes sort of reading multiple academic papers, each following a familiar structure: overview, data, methods and results, and conclusions.

Despite this, I highly recommend the book; it offers a clear and accessible explanation of sustainable growth and strategies for achieving it. The authors address thought-provoking questions such as:

  • Is industrialization a necessary step toward wealth?
  • Do we need the State to foster innovation?
  • How can countries escape the Middle-Income Trap?

On a more personal note, the clarity and empirical support of the authors’ model is so compelling that one might wonder why all countries have not adopted it. I know - governments often lack complete information about markets, and their top priorities do not always align with the well-being of their citizens. Still, it is disheartening that, having such a robust framework and explanation, the global trajectory does not always move in the right direction - in fact right now it seems to regress.

If you consider that the Nobel committee, awarding this prize, not only honors scientific achievement but also seeks to highlight pressing issues, then this was certainly an excellent choice. I strongly recommend this book to anyone interested in economic policy, innovation, and growth theory—it is accessible, well-organized, and thought provoking.

A final note: Joel Mokyr, in addition to his economic research, specializes in economic history - a distinct and fascinating field. His forthcoming book, “Two Paths to Prosperity: Culture and Institutions in Europe and China, 1000–2000,” is definitely on my reading list.