The power of creative destruction and the AI revolution
Details
Based on the Schumpeterian growth paradigm, this lecture explores how "creative destruction"—the process where new innovations displace old technologies—serves as the primary engine for long-run economic growth. Professor Philippe Aghion addresses the fundamental contradiction of market economies: while innovators are driven by the prospect of monopoly rents, those rents can ex-post be used to block new entries and stall progress. Managing this contradiction requires a strategic synergy of competition policy, smart industrial design, and robust social institutions.
Focusing on the AI revolution as a modern game-changer, Professor Aghion discusses how AI can dramatically boost productivity by automating both the production of goods and the generation of new ideas. Crucially, to mitigate job destruction and harness AI’s massive job-creation potential, economies must invest in adaptive education and "flexicurity" systems (combining labor flexibility with strong social protection). Furthermore, the lecture highlights the role of green innovation over degrowth, demonstrating how AI can overcome path dependency and lower transition costs to tackle climate change. Ultimately, Professor Aghion offers a tailored vision for Japan to navigate its current structural challenges, leveraging the synergy of competition, policy, and education to achieve stronger, greener, and fairer growth.
Speaker
Prof. Philippe Aghion
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