Every October, the Nobel Prize in Economics draws attention for its profound influence on global ideas and policymaking.

This year was no exception. The Nobel Prize was given for research on “for having explained innovation-driven economic growth" with the first half given to Messrs. Joel Mokyr (Northwestern University) — “for having identified the prerequisites for sustained growth through technological progress"— and the second half jointly to Philippe Aghion (LSE) and Peter Howitt (Brown University) — “for the theory of sustained growth through creative destruction" respectively. While this has global implications, their relevance to India deserves special scrutiny — what are some of the salient lessons for India?

Many commentators have focused on the idea of innovation-driven economic growth and the importance of creative destruction to enable the same. This Schumpeterian worldview has been rightfully acknowledged, and one can’t underestimate the importance of this to the Indian context. Given our complex legacy governance systems and systemic constraints to economic progress, the importance of constant innovation and churn is the need of the hour. The dynamic startup ecosystem that has evolved in India over the last few years and the digital revolution — digital public infrastructure and the JAM trinity — have catalysed this focus on innovation. Furthermore, new institutional reforms such as the Insolvency and Bankruptcy Code (IBC) have provided incentives for risk-taking and the creative destruction process. Yet there is another foundational dimension that this Nobel signifies that could really turbocharge India’s economic growth prospects.

Professor Mokyr’s work has also significantly dealt with the notion of........

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