Beyond the Innovation Mantra: What if Competition Law Should Pursue More Than Creative Destruction? Reflections after Philippe Aghion’s keynote at the OECD Competition Open Day, 4 March 2026

On 4 March 2026, at the OECD Competition Open Day in Paris, I followed Philippe Aghion – the 2025 Nobel laureate in economics – delivering the keynote speech that opened the eighth edition of this flagship event. The message was, in essence, familiar: competition drives innovation, innovation drives growth, and therefore competition policy must safeguard the conditions for “creative destruction” – the Schumpeterian process that Aghion and Peter Howitt formalized in their seminal 1992 model. The Nobel Prize itself was awarded precisely for this contribution: the theory of sustained growth through creative destruction.

I have the greatest respect for Aghion’s work. His contribution to understanding how innovation generates economic growth is monumental. But it is precisely because of the enormous influence his ideas now exert on competition policy worldwide that one must ask: is the “continuous innovation” paradigm enough? And more importantly, is it the right lens through which competition law should define its own purpose?

I think it is not. And I think competition lawyers and policymakers need to start saying this more openly.

I. The Limits of “Innovation Forever”

The Aghion-Howitt model – and the entire Schumpeterian growth paradigm – rests on a fundamental assumption: that innovation can be continuous, that the cycle of creative destruction regenerates itself indefinitely, and that the role of competition policy is, essentially, to keep the pathway clear for this cycle to operate. This is a powerful idea. But it also carries within it an unstated premise that deserves scrutiny: that innovation is, in principle, limitless.

Is it? The honest answer is: we do not know. What we do know is that the innovation frontier is increasingly costly to push forward. Research productivity in the United States and other advanced economies has been declining for decades. The number of researchers needed to achieve a given rate of technological progress has been growing exponentially. In pharmacology, in semiconductors, in energy – the low-hanging fruit has been picked. The breakthroughs of the next decades, if they come, will demand ever-larger investments, ever more complex institutional arrangements, and – critically – ever more concentrated market structures to fund them.

This does not mean innovation will stop. But it does suggest that the narrative of “continuous innovation” as an axiomatic guarantee of prosperity is more of a normative aspiration than a description of reality. And when a normative aspiration becomes the organizing principle of a field of law, we should be cautious.

The 1972 Limits to Growth report, long derided by mainstream economists, has proven remarkably prescient in its core intuition: that exponential growth in a finite system encounters boundaries. Six of the nine planetary boundaries have now been transgressed. The notion that innovation will always outpace the constraints imposed by physical reality is, at best, a wager. Competition law should not be built on a wager.

II. Innovation Without Distribution is Not Progress

But my deeper concern is not whether innovation can last forever. It is whether innovation, even when it occurs, is sufficient to deliver what competition law should ultimately deliver.

The conventional wisdom, reinforced by the Aghion framework, holds that competition fosters innovation, innovation produces growth, and growth improves welfare. This chain of reasoning is elegant. It is also incomplete. It omits a crucial link: the question of who benefits.

The empirical evidence of the last four decades tells a sobering story. Innovation has indeed continued, but its fruits have been captured by an ever-narrowing segment of the population. The labour share of national income has declined across the developed world. The gap between “superstar firms” and the rest has widened dramatically. Top income inequality has risen in lockstep with innovation rates – a finding that Aghion himself has documented, though he interprets it more benignly than I would.

The implication for competition law is profound. If competition succeeds in stimulating innovation but fails to ensure that the welfare gains are broadly distributed, then competition has succeeded only in one of its functions. It has promoted dynamic efficiency. But it has neglected what I consider an equally fundamental function: redistribution.

I use the term deliberately, knowing that it provokes discomfort in a discipline that has long insisted on its neutrality vis-à-vis distributional outcomes. But let us be honest: competition law has never been neutral. Every decision to prohibit a merger, to sanction a cartel, to condemn an abuse of dominance – redistributes. It transfers surplus from shareholders to consumers, from dominant firms to challengers, from capital to labour. The question has never been whether competition law redistributes, but in whose favour and to what extent.

III. The Unspoken Functions of Competition

The fathers of European competition law understood this. The ordo-liberal tradition that shaped Articles 101 and 102 TFEU was not primarily about maximizing innovation or even about efficiency in the narrow economic sense. It was about maintaining a competitive order that prevented the concentration of economic power, that preserved the freedom of market participants, and that served the broader social contract. The Freiburg School saw competition as a means to a just economic order – not merely as a mechanism for producing more and better goods.

Somewhere along the way, under the influence of the Chicago School and later the “more economic approach,” this richer understanding of competition was narrowed to a single metric: consumer welfare, often further reduced to price effects and, increasingly, to innovation effects. The Aghion paradigm, for all its sophistication, risks entrenching this reduction further, by making innovation the supreme value that competition law must serve.

But a society in which superstar firms innovate brilliantly while wages stagnate, in which digital platforms offer extraordinary services while hollowing out labour markets, in which pharmaceutical companies produce life-saving drugs that remain unaffordable to most – such a society cannot be said to enjoy the full benefits of competition, no matter how high its innovation rate.

IV. What Should Competition Law Pursue Instead?

I am not arguing that competition law should abandon innovation as a goal. Far from it. Innovation remains essential, and Aghion is right that competition policy can and must facilitate it. But I am arguing that innovation must be complemented by a set of objectives that the current mainstream too readily dismisses.

First, competition law must take seriously its redistributive dimension. This does not mean turning competition authorities into social policy agencies. It means recognising that the assessment of competitive harm cannot be divorced from the question of who bears it. When a merger generates efficiencies but eliminates jobs, when a dominant firm’s pricing algorithm maximizes welfare in the aggregate but discriminates against low-income consumers, when innovation rents are captured entirely by capital – these are competition problems, not externalities to be left to the tax system.

The argument that redistribution should be left to taxation and transfers, while competition law focuses on efficiency, does not survive serious examination. Taxation can correct inequalities only after they arise. Competition law, through the merger control, by shaping the rules of market interaction, can prevent them from arising in the first place. As Ioannis Lianos has persuasively argued, competition law is not only a tool of economic order, but also a form of social regulation. The institutional objection – that competition enforcers lack the democratic legitimacy to redistribute – is overstated: they redistribute already, every day, through every decision they make.

Second, competition law must reckon with the physical boundaries of innovation. The planetary boundaries framework tells us that six of nine critical thresholds have been crossed. If innovation is to contribute to human welfare, it must be directed not merely towards growth but towards sustainability. This requires competition policy to ask not only “does this merger reduce innovation?” but also “does this innovation serve a sustainable future?” The recent OECD discussions on sustainability and competition, however tentative, point in this direction.

Third, competition law must reassess its relationship with the concept of growth itself. The post-growth and “a-growth” literature – which proposes focusing on sound environmental, social, and economic policies regardless of their effect on GDP – is no longer a fringe academic curiosity. It is becoming a necessary intellectual framework for an era in which the equation “more innovation = more growth = more welfare” is breaking down. Competition law need not become degrowth advocacy. But it must develop the analytical tools to evaluate competitive processes in terms that go beyond their contribution to innovation and output.

V. A Provocation and an Invitation

I write this as a competition lawyer, not as an economist. My vantage point is that of someone who has spent over two decades working with competition rules in Romania and the European Union, and who has seen firsthand how the innovation narrative – for all its intellectual power – can become a shield behind which dominant firms justify their entrenchment and behind which policymakers avoid the harder questions about market power and its consequences.

Aghion’s keynote at the OECD Competition Open Day was, by all accounts, brilliant. But brilliance should not foreclose debate. The 2025 Nobel Prize, by crowning the creative destruction paradigm, has given it an authority that makes dissent more difficult but also more necessary.

The conventional wisdom holds that competition is the engine of innovation, and innovation is the engine of growth. I would propose a different formulation: competition is the engine of a just economy, and innovation is one of its products – but not its purpose. The purpose is broader: to organize economic life so that its benefits are accessible to all, so that market power does not become political power, and so that the pursuit of the new does not come at the expense of the sustainable.

If we reduce competition law to a handmaiden of innovation, we may end up with more innovation and less justice. And no amount of creative destruction will compensate for that.