Europe Must Not Fall Behind in Tech Innovation, Warns Nobel Laureate Philippe Aghion

AFP | Paris

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Nobel economics laureate Philippe Aghion has urged Europe to take bold steps to prevent the United States and China from dominating global technological innovation.

Aghion, who shared this year’s Nobel Prize in Economics with Joel Mokyr of the U.S. and Peter Howitt of Canada, stressed that Europe risks losing its competitive edge unless it prioritizes high-tech breakthroughs and builds stronger innovation policies.

“European countries must realise that we cannot allow the U.S. and China to become the only technological leaders,” Aghion said during a press conference in Stockholm following the announcement of the 2025 Nobel winners.

He noted that while Europe had narrowed the economic gap with the U.S. between World War II and the mid-1980s, that progress has since reversed. “The big reason is our failure to foster breakthrough, high-tech innovations,” he said. “We stayed focused on mid-level, incremental technology.”

Aghion linked his warning to the findings of the Draghi Report, authored by former European Central Bank president Mario Draghi, which called for massive EU investments — estimated at around €750–800 billion annually — to rejuvenate the bloc’s economy.

“We lack the right financial ecosystem and institutions for innovation,” Aghion added.

The Nobel committee recognized Aghion and Howitt for their influential theory of “creative destruction” — the process by which new technologies replace outdated ones, driving long-term economic growth. Mokyr, a professor at Northwestern University, was honored for his historical research tracing the roots of sustained economic expansion.