Nobel economics prize goes to three researchers for explaining innovation-driven economic growth

Joel Mokyr, Philippe Aghion and Peter Howitt won the Nobel memorial prize in economics yesterday for explaining how innovation creates new products and promotes economic growth and human welfare even as it leaves old businesses in the dust.

Their work was credited with helping economists better understand how new ideas and inventions come about — a process as old as steam locomotives replacing horse-drawn transport and as contemporary as e-commerce shuttering shopping malls.

Dutch-born Mokyr, 79, is at Northwestern University; Aghion, 69, at the Collège de France and the London School of Economics; and Canadian-born Howitt, 79, at Brown University.

The prize recognizes clearer understanding of a process known as creative destruction

The winners were credited with better explaining and quantifying “creative destruction,” a key concept in economics that refers to the process in which beneficial new innovations replace — and thus destroy — older technologies and businesses.

The concept is usually associated with economist Joseph Schumpeter, who outlined it in his 1942 book “Capitalism, Socialism and Democracy.” Schumpeter called the concept “the essential fact about capitalism.”