Economic growth in industrialized nations has become the norm since the industrial revolution. Even with periodic recessions many countries have come to expect and manage for growth. If you are a citizen in one of these countries, chances are you believe that improvements in quality of life should continue generation after generation - i.e. healthcare, food access, clean water and sanitation, transportation, energy utilities, media and communications, increase in income, consumer goods, and other conveniences.
And yet history shows that this steady growth is not a given. In most of history and still in some places, new knowledge and applications of knowledge did not and do not create a reliable economic engine that changes society on a continuous basis.
The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2025 was awarded to multinational research teams for "having explained innovation-driven economic growth."
Joel Mokr's historical research showed that in order for innovation to be sustained, we need to know why (the science) and then perfect the what and how (the application). And society in general needs to want and accept such changes. Before the industrial revolution, intellectual study and skilled trades did not mix enough to create the kind of "useful knowledge" and consistent practical discovery that shifts socioeconomic trends.
Philippe Aghion and Peter Howitt created a mathematical model for "creative destruction." We recognize this easily today as the process by which new organizations, products, and frameworks make old ones obsolete. It's a dynamic process that "creates" the new and "destroys" the old. From society's perspective every new innovation builds on the old, and value is not lost. The benefits and impacts add up for the society even as the churn puts some on top for a while until others come up and take their place.
These researchers identified a number of societal enablers that must be safeguarded to prevent recessions and stagnation, such as: ensuring influential entities (large corporations, governments, wealthiest class, etc.) do not repress the competitive dynamics; sharing global research; making balanced investments in research and development; supporting social mobility; requiring well-designed policies to protect against harmful and unsustainable outcomes; and more.
There are also essential actions that individual organizations can take to ensure they are among the continued survivors in the cycles of creative destruction:
Accurate Innovation Assessments
Organizations must evaluate their innovation capabilities in order to understand strengths and weaknesses, identify gaps, and set strategic direction.
Ask us about:
- InnoSurvey®️ is the world's largest validated global database for benchmarking innovation in organizations. We design the survey to meet your needs, run the survey with your teams, and you receive detailed insights on capabilities, blockers and amplifiers, and more. Sometimes we call this the X-ray! But we can also provide high-level "scores" through the InnovationIQ feature that are very useful too.
- The Wheel of Innovation is the best way to visualize your organization's innovation capabilities. Ideally, you have data from the Innosurvey, but the wheel is also a great educational tool. Scroll down for a photo and video gallery or click here: Wheel of Innovation In Action.
Adaptive Strategic Planning and Initiatives
Strategies must be designed to deal with rapid change and uncertainties, and your leadership team needs to develop the skills to work with the unknown.
Ask us about:
- PESTLED is an exercise to name the local and global external forces that will impact your organization. Political - Economic - Social - Technological - Legal - Environmental - Demographic.
- Scenario Analysis is a step-by-step process to develop a range of possible futures and then determine what actions you must take today to prepare. It also gives you better skills to read futures trends as they happen and influence your trajectory. Read more at this link: Achieving More Dynamic Strategies with Scenario Analysis.
Rigorous Decision Making
Choosing what actions to take, what projects and initiatives to invest in, and where to focus are the hardest skills of creative destruction at the organizational level. Your teams must employ a repeatable scientific approach by developing hypotheses/business cases and then run rapid experiments to gather evidence. This will ensure only the highest-value decisions are carried through to full implementation.
Ask us about:
- Hypotheses and Business Experiments as the gold standard for proving any investment you choose to make in the organization, replacing guesswork and opinions with data and confidence that carry initiatives forward. Scroll down for a video or click here: Even When You're Wrong, You're Right!
- Project Selection and Valuation allow you to understand the relative risk of the investments you are making in new initiatives so that you can phase them and not front-load the risk by committing too much, too soon in a weak proposal. Read a case study here: Value of Water Campaign.
Reliable Innovation Management.
Organizations must closely link innovation management to the strategic plan and support the entire process, from ideas to implementation. The headings above give you an idea of how to do this.
Ask us about:
- Business Model Innovation to adapt your organization to meet the needs of the future.
- 3i and 5i Innovation Process Models provide a path from ideation > incubation > implementation > integration > impact.
Erin (Pink) Mosley is an Innovation360 IMGB™️ Innovation Management Green Belt / Licensed Practitioner. Contact us to learn more.
Source credits go to:
- Innovation360 and Agent360
- The Royal Swedish Academy of Sciences
- Popular Science Background to the Prize in Economic Sciences 2025: From Stagnation to Sustained Growth. October 2025.
- Scientific Background to the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2025: Sustained Economic Growth Through Technological Progress. 13 October 2025.
First posted November 5, 2025
Written by Erin (Pink) Mosley
©️ 2025 Erin Mosley, Inc.
