Philippe AghionEvery podcast appearance, updated as new ones drop

We end Season 10 with an intimate interview between the Nobel Prize winning economist Philippe Aghion and Will Hutton. They delve into the concept of "creative destruction," a term coined by economist Joseph Schumpeter, which highlights the dual nature of innovation in driving economic growth while simultaneously rendering older methods and certain industries and jobs obsolete. Aghion believes that for an economy to thrive creative destruction is key. They talk about certain countries such as Finland where creative destruction is allowed and supported to thrive by the Government. Aghion is Professor of Economics at the LSE. In the We Society podcast, join acclaimed journalist and Academy president Will Hutton, as he invites guests from the world of social science to explore the stories behind the news and hear their solutions to society’s most pressing problems. Don’t want to miss an episode? Follow the show on your favourite podcast platform and you can email us on wesociety@acss.org.uk and tell us who we should be speaking to. The We Society podcast is brought to you by the Academy of Social Sciences in association with the Nuffield Foundation and the Leverhulme Trust . Producer: Emily Uchida Finch Assistant Producer: Emily Gilbert A Whistledown Production for the Academy of Social Sciences

Filippo Gaddo, Managing Director at A&M and SPE Councillor, interviewed Philippe Aghion, Professor at the College de France, INSEAD and at the London School of Economics, and author of the book ' The Power of Creative Destruction: Economic Upheaval and the Wealth of Nations' . In this engaging interview, Filippo and Philippe delve into the crucial role of innovation in driving long-term economic growth, with a focus on Europe’s position in the global innovation landscape. Aghion, drawing from his Schumpeterian framework of creative destruction, emphasizes that growth stems from successive waves of innovation, where entrepreneurs are motivated by temporary monopoly rents but face eventual displacement by newer technologies. He warns against both monopolistic stagnation and overregulation, both of which can stifle innovation. A key theme is the distinction between catch-up and frontier innovation. Aghion argues that Europe has largely remained stuck in mid-tech incrementalism and needs to evolve into a frontier innovator like the U.S. To achieve this, reforms are essential: creating a unified internal market, expanding venture capital, strengthening basic research funding, and establishing institutions akin to the U.S.'s DARPA. The future of the European economy, he suggests, hinges on embracing innovation-friendly policies as outlined in recent reports by Mario Draghi and others. Aghion critiques rising protectionism and stresses that Europe’s best response to global economic shifts, including U.S. tariffs, is to double down on innovation rather than resort to retaliation. Innovation is crucial to productivity, which is key for growth, which in turn leads to prosperity - this interview thus touches on the core of our profession. Professor Philippe Aghion is a Professor at the College de France, INSEAD and at the London School of Economics, and an Associate of the Centre for Economic Performance. He is 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 summarized 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 survey “What Do We Learn from Schumpeterian Growth Theory” (joint with U. Akcigit and P. Howitt.) In 2001, Philippe Aghion received the Yrjo 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 BBVA “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.” For more info see: https://www.philippeaghion.com/

Our guest in this episode is Philippe Aghion! We talk about Marx, Schumpeter, creative destruction, capital accumulation, history, middle income countries, political economy, and more!

While many on the left are calling for radical change and the fall of capitalism, Philippe Aghion says the answer is to create better capitalism by understanding and to harness the power of creative destruction. That's the focus of his latest book, The Power Of Creative Destruction: Economic Upheaval And The Wealth Of Nations. Philippe is a French economist who is a Professor at College de France, INSEAD, and the London School of Economics. Listen as we dive into the theories behind The Power of Creative Destruction, different types of competition, legacy firms vs. small innovative firms, and the case of Korea in the 90s. Episode Quotes: 2 ways competition effects innovation: More competition will make us innovate so that I can do better than you. That's the thought whereby competition spurs innovation. On the other hand, there is a discouraging effect of competition. If I am behind you and there is more competition, I have less incentive to catch up. You see, you have these two effects and that's why the relationship between competition and innovation in the aggregate, is that kind of interrupted your relationship. COVID and creative destruction in France: COVID made it clear for example, to countries like France, that much more of what we need to put in place an innovation ecosystem from basic research, all the way to industrialization, to regain control of a huge change in various sectors, where we lost this control. And it will happen a lot through creative destruction, through new firms coming in and replacing old activities. Not because you will bring back old firms that have plants in China back to France. That's not the way it will happen. It will happen very much through creative destruction. In frontier economics - even the unskilled labor gets paid more than in places where you have less sophisticated technology: They [innovative firms] in fact provide more what we call “good jobs.” You have two kinds of skills. You have the hard skills that you learn at school. But you have what we call the sub skills which are, the ability to interact with other employees of the firm or the, how you get the synergies that you have with the other assets of the firm. And those are what we call subsidiary liability. Your ability to interact, and to understand how to play as a team player. All those things are not things you learn at school. They are things that we call sub skills. Some of them you have them, or you don't have them. Some of them you acquire through training. Show Links: Guest Profile: Faculty Profile at the London School of Economics Faculty Profile at Paris School of Economics Professional Profile at Harvard University His work: Phillippe Aghion on Google Scholar The Power of Creative Destruction: Economic Upheaval and the Wealth of Nations The Economics of Growth Competition and Growth: Reconciling Theory and Evidence An Agenda for a Growing Europe: The Sapir Report Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Philippe Aghion is professor of economics at the London School of Economics and Collège de France and INSEAD, and formerly of Harvard University. He joins BCG Global Chief Economist Philipp Carlsson-Szlezak in conversation to discuss his new book The Power of Creative Destruction: Economic Upheaval and the Wealth of Nations , a broad take on the different variants of capitalism and their shortcomings. Among other things, the conversation zooms in on the trade-off between innovation/growth and social protection and what could be done to balance these more effectively. Prof. Aghion makes the case that capitalism can both be innovative and inclusive if the right policies are pursued. *** About the BCG Henderson Institute The BCG Henderson Institute is the Boston Consulting Group’s think tank, dedicated to exploring and developing valuable new insights from business, technology, economics, and science by embracing the powerful technology of ideas. The Institute engages leaders in provocative discussion and experimentation to expand the boundaries of business theory and practice and to translate innovative ideas from within and beyond business. For more ideas and inspiration, sign up to receive BHI INSIGHTS , our monthly newsletter, and follow us on LinkedIn and Twitter .

On May 10 Professor Philippe Aghion, Collège de France, received the Global Award for Entrepreneurship Research 2016 . Global Award is the most prominent international award in entrepreneurship research with a prize sum of € 100 000. Professor Aghion is one of today’s most influential researchers in the field of economics. In this interview he talks about entrepreneurship and economic growth, why higher education is so important for prosperity, and how the state can best promote entrepreneurship, etcetera.