Property Right Institutional Foundations of Innovation‑Driven Sustained Economic Growth

Sustained economic growth has long stood as the core pursuit of macroeconomic research and social development. Traditional growth theories centered on capital accumulation, labor input, and scale expansion fail to explain the divergent growth trajectories of economies with similar factor endowments in modern society. The 2025 Nobel Prize in Economic Sciences honors three economists for their systematic interpretation of innovation‑driven economic growth, filling the theoretical gap in the internal logic of long‑term economic expansion. Joel Mokyr, Philippe Aghion, and Peter Howitt’s research decomposes the essence of innovative growth into two core dimensions: the preconditions for technological progress to generate continuous economic value, and the iterative growth mechanism realized through creative destruction. From the perspective of property rights economics, the emergence and iteration of technological innovation are not purely spontaneous technological behaviors but are deeply constrained by institutional arrangements including resource right definition, transaction efficiency, and legal protection. Clear granularity of property right definition and standardized legal constraint boundaries constitute the fundamental institutional guarantee for converting scientific and technological progress into sustainable economic growth. This article adopts the analytical paradigm of property right classification, resource transaction efficiency evaluation, and legal protection economic assessment to dissect the institutional logic behind innovation‑driven growth, verify the practical applicability of creative destruction growth theory, and summarize the institutional optimization paths for empowering long‑term economic growth through technological innovation.
 

Theoretical Connotation of Innovation‑Driven Growth: A Dual Theoretical Framework

The 2025 Nobel Economic Prize research constructs a complete theoretical system for innovation‑driven sustained growth, which can be divided into two mutually supportive theoretical modules with distinct logical boundaries. The first module focuses on the preconditions of technological progress driving growth, proposed and verified by Mokyr through long‑term economic history research. Most technological innovations in human history fail to form continuous economic growth momentum, even though emerging technologies constantly appear in various historical stages. The core reason lies in the absence of systematic supporting conditions for the transformation from scientific knowledge to industrial value. Mokyr’s concept of “industrial enlightenment” clarifies that sustained technological progress relies on two basic social premises: the public dissemination of useful scientific knowledge and the social openness to innovative ideas. From the perspective of property rights economics, these two premises essentially reflect the institutional liquidity of intellectual property rights and the inclusive protection mechanism of emerging technological rights. Without clear definition of intellectual property boundaries, scientific knowledge will be confined to academic circles and cannot form tradable economic resources; without inclusive legal protection for innovative behaviors, social markets will form institutional resistance to technological iteration, blocking the transformation of technological progress into growth dividends.

The second theoretical module is the Schumpeterian growth paradigm jointly established by Aghion and Howitt, which takes “creative destruction” as the core logic of sustained economic growth. Different from static factor optimization growth theories, this paradigm emphasizes that economic growth is a dynamic iterative process in which new technologies, new industries, and new business models replace old ones. The essence of creative destruction is the continuous restructuring of social resource rights: innovative subjects obtain resource use rights and market transaction rights through technological breakthroughs, while traditional resource owners withdraw from the market due to the loss of technological competitive advantages. This dynamic resource right replacement mechanism is the fundamental source of long‑term economic growth. The core value of this theory lies in breaking the static cognition of economic growth, linking growth sustainability with the efficiency of resource right reallocation, and providing a theoretical basis for analyzing the institutional role of governments in innovative economic development. In the institutional system where property right definition is unclear and transaction barriers are high, the creative destruction mechanism will fail, and the economy will fall into stagnation dominated by traditional factor dependence.
 

Property Right Institutional Constraints on Technological Innovation and Growth Transformation

Based on the economic evaluation system of legal protection and resource transaction efficiency in property rights economics, the conversion efficiency of technological innovation into economic growth is constrained by three core institutional dimensions, namely the granularity of innovative property right definition, the transaction cost of technological resource rights, and the constraint scope of legal protection mechanisms. These three institutional factors jointly determine whether technological progress can cross the threshold from sporadic technological breakthroughs to sustained economic growth.

First, the granularity of innovative property right definition determines the incentive intensity of technological innovation behaviors. Innovative resources represented by technology and knowledge have typical public product attributes and boundary ambiguity compared with traditional tangible resources such as land and capital. Traditional property right systems are mostly designed for tangible resource transactions, with rough definition of intellectual property rights, technological achievement rights, and innovative income rights. Vague right boundaries will lead to two typical institutional problems. On the one hand, the innovation income of research and development subjects cannot be effectively exclusive, and the spillover of innovative achievements without right restraint will reduce the marginal return of independent research and development, inhibiting the spontaneous innovation willingness of market subjects. On the other hand, ambiguous right definition leads to overlapping rights and interest disputes in the transformation of technological achievements, increasing the institutional uncertainty of innovative investment. Mokyr’s research on European industrial revolution history confirms that the institutional progress of refined intellectual property right definition in 18th‑century Europe was a key prerequisite for the transformation of scientific enlightenment achievements into industrial technological progress. The refined division of innovative property rights makes each link of knowledge production, technological research and development, and achievement transformation correspond to clear subject rights and interest distribution rules, forming a stable innovation incentive mechanism.

Second, the transaction efficiency of technological resource rights restricts the iteration speed of creative destruction. The core of Aghion and Howitt’s creative destruction theory is the efficient reallocation of social resources. Technological innovation essentially reshapes the value measurement standard of social resources, and the realization of this value reshaping relies on the free transaction and flow of technological resource rights in the market. In regions with high resource transaction barriers, traditional resource rights holders can rely on institutional barriers to maintain market monopoly positions, blocking the market entry of new technological achievements and innovative subjects. High transaction costs will solidify the original resource allocation pattern, make it impossible for superior innovative technologies to replace backward production capacity, and terminate the dynamic growth cycle of creative destruction. From the perspective of property right transaction efficiency evaluation, the optimization of innovative economic systems is essentially the process of reducing the transaction cost of technological resource rights, simplifying the confirmation, circulation, and value realization procedures of innovative achievements, and enabling emerging technologies to quickly occupy market resource space and drive industrial upgrading and economic growth.

Third, the legal protection constraint scope determines the sustainability of innovative growth. The sustained role of technological progress in economic growth requires long‑term and stable legal institutional protection, rather than short‑term policy incentives. Legal protection of innovative property rights has dual constraint attributes: it not only protects the legitimate rights and interests of innovative subjects and prevents the infringement of innovative achievements, but also restricts the excessive monopoly of technological rights and avoids the solidification of innovative advantages into market barriers.

Excessively loose legal protection will lead to widespread plagiarism and infringement of technological achievements, making innovative investment unable to obtain corresponding market returns; excessively strict monopoly protection will hinder the secondary innovation and iterative upgrading of technologies, stifle the creative destruction mechanism. A standardized legal protection system needs to form a moderate constraint boundary, which can fully protect the innovation income of R&D subjects and reserve institutional space for technological iteration and market competition, so as to ensure the long‑term sustainable operation of the innovation‑driven growth model.
 

Practical Institutional Dilemmas of Innovation‑Driven Growth in Modern Economies

Combined with the current development status of global innovative economies, most countries face institutional dilemmas in the matching of property right systems and innovation‑driven growth, which restrict the full release of technological growth dividends. These dilemmas are mainly reflected in three aspects of property right operation: incomplete right definition, unbalanced transaction efficiency, and mismatched legal protection mechanisms.

The first dilemma is the incomplete granularity of emerging innovative property right definition. With the rapid development of digital economy, artificial intelligence, and synthetic biology, emerging innovative achievements present characteristics of cross‑discipline integration and multi‑subject collaboration. The existing property right system forms a clear division for traditional technological patents, but has vague definition boundaries for collaborative innovation achievements, algorithmic technological rights, and digital intellectual property rights. Many emerging innovative resources are in the “right blank zone” of institutional supervision, leading to unclear income distribution rights and usage rights of innovative achievements. This institutional defect makes a large number of emerging technological innovations unable to form standardized market transactions, resulting in the waste of innovative resources and the delay of industrial transformation, which directly limits the expansion of innovation‑driven growth space.

The second dilemma is the unbalanced transaction efficiency of technological resource rights in different market fields. In mature industrial fields with sound institutional systems, technological achievement transactions have standardized processes and clear right confirmation rules, with low transaction costs and high resource allocation efficiency. However, in emerging industrial fields such as new energy and artificial intelligence, the supporting trading systems and right circulation mechanisms are not perfect. The valuation, mortgage, transfer, and industrialization conversion of emerging technologies face high institutional thresholds, making it difficult for high‑quality innovative technologies to quickly connect with market capital and industrial resources. The unbalanced transaction efficiency leads to the separation of technological innovation and economic growth, forming a structural contradiction between sufficient innovative achievements and insufficient growth conversion capacity.

The third dilemma is the mismatch between legal protection intensity and innovative growth stages. Some economies adopt excessive protection policies for core technological patents, leading to the formation of technological monopolies in individual industries. Long‑term monopoly rights inhibit market competition and secondary innovation, making the creative destruction mechanism fail to function, and the industry falls into low‑efficiency growth stagnation. In contrast, some emerging economies have insufficient legal protection for innovative property rights, serious infringement problems, and unstable innovation income expectations of enterprises and researchers, resulting in insufficient continuous investment in basic research and original innovation. The two types of legal protection mismatches will hinder the sustainable cycle of technological innovation and economic growth, making the economy unable to get rid of factor‑dependent growth inertia.
 

Institutional Optimization Paths for Empowering Sustained Innovative Economic Growth

Based on the property right institutional constraints of innovation‑driven growth and the practical dilemmas of modern economic operation, combined with the theoretical system of the 2025 Nobel Economics Prize, the institutional optimization of innovative growth should focus on refining right definition standards, improving resource transaction efficiency, and optimizing legal protection boundaries, so as to build a institutional system matching the creative destruction growth mechanism.

First, refine the granularity of innovative property right definition and fill institutional blank zones. Targeting the right ambiguity of emerging technological innovations, clarify the subject attribution, usage boundary, income distribution, and transfer rules of collaborative innovation achievements, digital technologies, and algorithmic achievements. Establish a classified property right definition system for traditional technological patents and emerging innovative resources, realize full coverage of institutional rules for innovative resource rights, and eliminate institutional uncertainty in innovative investment and achievement transformation. Clear right boundaries can effectively stimulate the spontaneous innovation motivation of market subjects, laying a micro‑foundation for sustained technological progress.

Second, build a standardized trading system for technological resource rights and improve market allocation efficiency. Optimize the trading procedures of technological achievements, establish a professional valuation and evaluation mechanism for emerging technologies, simplify the right confirmation, registration, and transfer processes of innovative resources, and reduce the transaction cost of technological innovation industrialization. Break the institutional barriers between innovative technologies and industrial capital, promote the free flow and efficient reallocation of innovative resources in the whole market, and ensure that superior emerging technologies can quickly replace backward production capacity, so as to continuously release the growth momentum of creative destruction.

Third, optimize the moderate legal protection boundary of innovative property rights and balance innovation incentive and market iteration. Formulate differentiated legal protection rules according to industrial attributes and innovation stages. For basic original innovations, strengthen legal protection intensity to guarantee the long‑term innovation income of research subjects. For applied technological innovations in competitive fields, limit excessive patent monopoly rights, encourage market competition and secondary technological iteration, and maintain the dynamic vitality of the creative destruction mechanism. Realize the institutional balance between innovation incentive and industrial iteration, and support long‑term stable innovative economic growth.
 

Conclusion

Innovation‑driven sustained economic growth is not a simple technological progress process, but a systematic economic operation process based on perfect property right institutional arrangements. The theoretical research of the 2025 Nobel Prize in Economic Sciences reveals the essential law that technological progress and creative destruction drive economic growth, while property right institutions determine the realization efficiency and sustainability of this law. The refined definition of innovative resource rights, efficient market transaction mechanism, and moderate legal protection boundary constitute the three core institutional pillars of innovation‑driven growth. Modern economies need to take institutional optimization as the core starting point to solve the structural dilemmas of innovation and growth mismatch, break the institutional constraints on technological innovation transformation, and realize the long‑term positive cycle of technological progress, resource reallocation, and sustained economic growth. In the context of global technological competition and industrial upgrading, the improvement of innovative property right systems will become the key institutional advantage for economies to seize innovative growth dividends and maintain long‑term economic competitiveness.

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In‑depth exploration of the coupling mechanism between institutional economics and innovative growth can further help us grasp the essential rules of long‑term macroeconomic development.