| Title | Fostering green and inclusive productivity growth |
|---|---|
| Contributor | Philippe Aghion (author) |
| John Van Reenen (author) | |
| DOI | https://doi.org/10.31389/lsepress.tlc.b |
| Landing page | https://doi.org/10.31389/lsepress.tlc.b |
| License | https://creativecommons.org/licenses/by-nc/4.0/ |
| Copyright | Author(s) |
| Publisher | LSE Press |
| Published on | 2025-10-16 |
| Short abstract | This chapter explains the main ideas underpinning the Schumpeterian growth paradigm and how it provides a new lens to look at the determinants and effects of the growth process. Schumpeter was pessimistic about the future of capitalism. Indeed, his belief was that capitalism was doomed because in his view it was impossible to prevent incumbent firms from barring new innovations, either directly or by exploiting political connections with government authorities. The chapter uses the lenses of the Schumpeterian paradigm to revisit growth policy debates and also to rethink capitalism and its ability to reconcile the promise of sustained prosperity with the quest for greener and more inclusive growth. We argue that the proper functioning of an economy of innovation and creative destruction rests on the triangle between firms that innovate, the state, which is meant to regulate and invest, and civil society, which serves as a watchdog to induce firms and the state to do the right things. This chapter includes responses to Philippe Aghion and John Van Reenan by Diane Coyle and Timo Boppart. |
| Long abstract | This chapter explains the main ideas underpinning the Schumpeterian growth paradigm and how it provides a new lens to look at the determinants and effects of the growth process. Schumpeter was pessimistic about the future of capitalism. Indeed, his belief was that capitalism was doomed because in his view it was impossible to prevent incumbent firms from barring new innovations, either directly or by exploiting political connections with government authorities. The chapter uses the lenses of the Schumpeterian paradigm to revisit growth policy debates and also to rethink capitalism and its ability to reconcile the promise of sustained prosperity with the quest for greener and more inclusive growth. We argue that the proper functioning of an economy of innovation and creative destruction rests on the triangle between firms that innovate, the state, which is meant to regulate and invest, and civil society, which serves as a watchdog to induce firms and the state to do the right things. This chapter includes responses to Philippe Aghion and John Van Reenan by Diane Coyle and Timo Boppart. |
| Language | English (Original) |
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Philippe Aghion is a Professor at the College de France, Institut européen d’administration des affaires, the London School of Economics, and a fellow of the Econometric Society and of the American Academy of Arts and Sciences. His research focuses on the economics of growth. With Peter Howitt, he pioneered the so-called Schumpeterian growth paradigm, which was subsequently used to analyse the design of growth policies and the role of the state in the growth process. Much of this work is summarised in their joint book Endogenous Growth Theory (MIT Press, 1998) and The Economics of Growth (MIT Press, 2009), in his book with Rachel Griffith on Competition and Growth (MIT Press, 2006), and in his recent book The Power of Creative Destruction (Harvard University Press, 2021, joint with C. Antonin and S. Bunel). In 2001, Philippe Aghion received the Yrjö Jahnsson Award of the best European economist under age 45, in 2009 he received the John Von Neumann Award, and in March 2020 he shared the Banco Bilbao Vizcaya Argentaria Frontier of Knowledge Award with Peter Howitt for ‘developing an economic growth theory based on the innovation that emerges from the process of creative destruction’.
John Van Reenen is Ronald Coase School Professor at LSE and Digital Fellow at the Initiative for the Digital Economy at the MIT. Until 2020 he was Gordon Billard Professor MIT in the Economics Department and Sloan Management School. He has published over a hundred papers on many areas in economics, with a particular focus on firm performance and the causes and consequences of innovation. He was the 2009 winner of the Yrjö Jahnsson Award (the European equivalent of the Clark Medal); the Arrow Prize (2011); the European Investment Bank Prize (2014); and the HBR-McKinsey Award (2018). He is a fellow of the British Academy, the Econometric Society, the NBER, CEPR, and the Society of Labor Economists. In 2017, he was awarded an OBE for ‘services to public policy and economics’ by Queen Elizabeth II.
Timo Boppart is Professor at University of Zurich and Associate Professor at the Institute for International Economic Studies (IIES) Stockholm University. He is interested in macroeconomics, broadly defined with a special focus on growth, firm dynamics, development and labour supply. Boppart is an associate editor of Econometrica and Quantitative Economics, as well as on the editorial board of Review of Economics Studies.
Diane Coyle is Bennett Professor of Public Policy at the University of Cambridge, and author of The Measure of Progress (Princeton University Press, 2025). She has served in many policy roles, most recently as an advisor to the Competition and Markets Authority and member of the UK Government’s New Towns Taskforce.