New Approaches to Growth Theory: Lessons for Future Research in Business Administration

The 2025 Nobel Prize in Economic Sciences was awarded to three eminent economists—Philippe Aghion, Peter Howitt, and Joel Mokyr—for their groundbreaking research elucidating how innovation drives sustainable economic growth. Their collective work not only reshapes macroeconomic theory but also offers profound insights relevant for Business Administration, highlighting key directions for future research in the field.







Researcher


Overarching Theoretical Framework


Core Concepts & Contributions


Key Publications (Examples)




Philippe Aghion


Schumpeterian Growth Models (Creative Destruction)


Formalized the concept of creative destruction, where innovation displaces incumbents; analyzed the nuanced relationship between competition and innovation; studied the role of public policies in shaping innovation incentives.


Aghion & Howitt (1992); Aghion et al. (2005); Aghion & Howitt (2009)




Peter Howitt


Technology-Based and Learning-Driven Growth


Developed models of learning-by-doing; emphasized human capital as critical for technology absorption; modeled R&D-driven innovation as a source of long-term growth.


Howitt & Aghion (1998); Howitt (2000); Aghion & Howitt (2009)




Joel Mokyr


Economic History & Institutions of Knowledge


Historicized the knowledge economy; distinguished scientific knowledge from technological application; highlighted the institutional prerequisites enabling the Industrial Revolution and ongoing innovation.


Mokyr (1990); Mokyr (2002); Mokyr (2016)







Researcher Overarching Theoretical Framework Core Concepts & Contributions Key Publications (Examples)

Synthesis and Implications:

Joel Mokyr’s historical and institutional analysis explains why robust institutions and cultural frameworks are essential to ignite innovative growth. Meanwhile, Aghion and Howitt’s theoretical models specify how innovation is sustained in market economies through continuous cycles of creative destruction, where new technologies replace outdated ones (Nobel Prize Committee, 2025; NBER, 2025). This underscores the vital role of innovation as the driver of firm and industry evolution, implicating strategic business practices focused on fostering ongoing innovation and managing competitive dynamics.

Peter Howitt’s emphasis on human capital highlights the critical need for firms to invest in workforce skills aligned with evolving technological demands. This insight directly ties into strategic human resource management and organizational capabilities development, stressing that technology investments must be complemented by talent development and adaptive organizational structures.

Moreover, Mokyr’s work reminds managers to consider broader institutional contexts—laws, regulations, intellectual property rights, and socio-cultural norms—that shape innovation incentives and entrepreneurial potential. Thus, astute leadership and strategic foresight must include influencing and adapting to these macroeconomic and institutional environments.

Journal Policies for Future Research:

Motivated by these seminal contributions, our journal affirms a commitment to advancing research strands that:

1. Examine managerial strategies for navigating and leveraging creative destruction, particularly in radical innovation and new market creation.

2. Investigate the nexus between technology, skills development, and organizational adaptation within evolving technological landscapes such as AI and digitalization.

3. Analyze the influence of institutional economics on firm strategies, public policies, and innovation systems.

4. Employ mixed methodologies, combining quantitative firm-level analyses with historical and qualitative approaches, to enrich understanding of innovation processes.

Integrating these insights from economic growth theory with applied Business Administration research promises to enhance both scientific rigor and managerial relevance, guiding organizations in navigating complex, innovation-driven economies.