LSE: Public lectures and events Creative destruction, AI, and the European recovery
Feb 24, 2026
Philippe Aghion, Nobel-winning economist known for work on creative destruction, explores growth, competition and technology. He discusses Schumpeterian innovation, superstar firms and why Europe lagged the US. He examines middle-income traps, AI’s promise and risks, and policy trio—flexible labor protection, education and competition—to steer inclusive recovery.
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Episode notes
When A Theory Gets Destroyed It Is Validated
- Aghion jokes that creative destruction making his own theory obsolete would actually validate it.
- He frames technological revolutions as successive resets: steam, electricity, IT, now AI.
Rebuild Europe's Innovation Ecosystem Now
- Build the ecosystem Europe lacks: complete the single market, expand long‑term research funding, strengthen venture capital and institutional investors.
- Create DARPA‑style agencies and cross‑border coalitions to finance high‑risk breakthrough projects.
Implement Flex Security To Protect Workers And Growth
- Adopt flex‑security: generous temporary income support plus active retraining to make creative destruction less socially costly.
- Aghion cites Denmark evidence showing job loss there does not raise antidepressant use or mortality.
