Philippe Aghion, renowned for his three decades of work studying economic growth driven by innovation, has stated today that “without inclusive economic growth, populism arises.”
In an interview conducted shortly before receiving the Nobel Prize, the economist, who teaches in Paris and London, addressed the current political and economic situation in the United States, warning that the country “risks devolving into crony capitalism, where a group of businessmen captures the government and prevents new talents from entering the economic system.”
The Nobel Prize winner emphasized the need for an effective competition policy to preserve democratic mechanisms.
Regarding Europe, Philippe Aghion highlighted the continent’s main issue as being unable to implement groundbreaking innovations because there is “no adequate ecosystem for it.”
He stated, “There is a lack of a single market, a financial ecosystem conducive to innovation, and we do not have a strong industrial policy. The big innovative companies in Europe are the same as 25 years ago. This is not the case in the United States. We remain a medium-technology economy, while the United States or China have leapt to high technology.”
The laureate noted that Europe surpasses the United States in every value capable of attracting talented individuals, yet for this talent to settle, a single market and an educational system more connected to the workforce are necessary.
Philippe Aghion also expressed disagreement with the prevalent notion within European companies of dismissing workers once they reach 50, asserting that “the economic system benefits from the contributions of people of all ages.”
In this regard, “Europe cannot prosper without immigration.”
He emphasized, “We have a predominantly aging population, which makes us less innovative. Young immigrants eager to work, bring new ideas, and energize the economy are needed,” he concluded.
Philippe Aghion stressed that innovation and necessary reforms must always be “accompanied by opportunities for all, regardless of their origin, to ensure access to quality education and social protection. When growth is not inclusive, it opens the door to populism.”
