Nobel Prize in Economics 2025 -Reinventing Growth: From Creative Destruction to Permanent Transformation

The 2025 Nobel Prize in Economics awarded to Philippe Aghion and Peter Howitt reminds us of a fundamental truth: growth doesn’t fall from the sky. It is built, day after day, through the ability of individuals, companies, and territories to innovate, learn, and reinvent themselves.

From Solow to Aghion: Understanding the Real Engine of Growth

In the 1950s, Robert Solow, a researcher at MIT, showed that a country’s growth depended on two main factors: capital and labor. But these two levers explained barely half of economic performance. The rest, the famous “Solow residual”, seemed to come from somewhere else: a mysterious form of technical progress, external to organizations.

Aghion and Howitt resolved this mystery: this progress actually stems from efforts in research and innovation. Growth is therefore not a spontaneous phenomenon; it results from a continuous movement of learning and experimentation. Each new idea improves, replaces, or renews what already exists. Economic vitality comes from this ability to let the new emerge without destroying the meaning of the present.

Today, real performance lies in the continuity of movement. A company balanced between a well-managed present and an emerging future is a resilient, adaptable organization connected to the world. It is this equilibrium that fuels value creation: 50 percent from exploiting what exists, 50 percent from exploring what comes next.

From Creative Destruction to Permanent Transformation

Their model describes a world where innovation constantly renews the productive base.

But rather than speaking of creative destruction, we prefer to speak of permanent transformation, a movement that is more fluid, more natural, more human.

That is the true meaning of this dynamic: a living organization finds its balance between two vital forces:

• Exploiting the existing: valuing what works, capitalizing on know-how;

• Exploring what’s next: listening to the world, experimenting, imagining new answers,

defining the role one wants to play in the future and developing the knowledge, technologies, and value-creation models to achieve it.

Permanent transformation is not an exceptional state; it is the living rhythm of a collective, a way of being in action, in listening, in continuous regeneration. It is the managerial translation of an economic principle now honored by a Nobel Prize: in a world shaken by economic, social, and geopolitical disruptions, the ability to transform continuously has become the first strategic resource.

For today’s leaders, the challenge is no longer to “manage change.” It is to embed their company within a living dynamic of permanent transformation. Not to resist the shocks of the world, but to turn them into a lever for collective learning.

Rehabilitating Innovation: Not a Cost, but a Vital Investment

Too often, innovation is still seen as a cost, an expense line, a risky bet, a luxury to be afforded when times are good, or the convenient “adjustment variable” when budgets are tight. That is a strategic mistake.

Innovation is not an expense; it is an investment in the capacity to endure.

It allows an organization to anticipate, to learn, and to create the conditions for its next performance. It is what ensures competitiveness, sustainability, and shared meaning.

Without innovation, an organization exhausts itself; with it, it regenerates.

In an economy of permanent transformation, innovation becomes living capital:

a deliberate investment that fuels today’s growth and makes tomorrow’s possible.

It is the economic breathing of the enterprise.

To invest in innovation is to invest in one’s own vitality. It is to accept that performance can no longer be measured solely in financial results, but also in the ability to learn faster than the world changes. Failing to do so means letting disruption decide in your place.

Dare Permanent Transformation

The distinction between creative destruction and permanent transformation is not merely semantic; it is a shift in perspective. The first emphasizes rupture; the second, movement.

Where one destroys to rebuild, the other learns to grow.

Permanent transformation offers a calmer, more organic vision of growth that of a system that renews itself without denying itself, that moves forward without burning out, that creates value while remaining true to its DNA.

This is the path that companies, territories, and institutions, public and private alike, must now follow: moving from a logic of sporadic reform to a logic of continuous regeneration.

The Nobel Prize awarded to Aghion and Howitt does not only honor an economic theory;

it invites us to see growth differently, as a living dynamic, where innovation, knowledge, and cooperation become the true engines of prosperity.

So yes, dare permanent transformation !