Joel Mokyr, 2025 Nobel Laureate, shows that knowledge economies evolve through culture, institutions, and ideas—not just markets—offering key insights for India’s ambition to become a global knowledge power.

Key Points of Mokyr Contributions

• Beyond Economic Reductionism: Mokyr challenges the dominant economic notion that development is driven merely by incentives.
  • He argues that knowledge creation cannot be switched on like a tap through monetary rewards or market demand.
• Necessity and Capacity: In a book, The Lever of Riches, he asserts that necessity is not the mother of invention.
  • Societies must also have the capacity to respond to necessity, which depends on institutions, culture, and human imagination.
• Weberian Sensibility: Mokyr’s approach is Weberian — recognising social causation as complex and non-linear. 
  • Unlike Douglas North or Acemoglu, he avoids oversimplified institutional determinism and embraces historical nuance.
• Intellectual Integrity: He values parsimony as a tool, not an end, and openly acknowledges the limits of his explanations.
• Dual Nature of Knowledge (Propositional and Prescriptive Knowledge): Mokyr distinguishes between propositional knowledge (understanding natural laws) and prescriptive knowledge (techniques and applications).
  • He argues that the Industrial Revolution was powered by the synergy between these two — discovery and invention feeding each other.
• Scepticism of the State: Mokyr often downplays the state’s role in sustaining innovation, viewing it as an obstacle that “picks losers.”

Mokyr’s Explanation for Europe’s Innovation Surge

• Political Fragmentation and Competition: Mokyr attributes Europe’s progress to political fragmentation, where competing states attracted scientists and thinkers, and the persecuted could find refuge elsewhere, exemplified by Catholic Italy and Protestant Holland.
• Free Flow of Ideas: Despite political boundaries, Europe sustained a transnational intellectual network, the Republic of Letters, where scholars freely exchanged ideas, combining competition and idea circulation to foster a culture of innovation.

Missed Opportunity In India

• Deep Disconnect: India’s aspiration to become a global knowledge power is hindered by a deep disconnect between scientific research (Propositional Knowledge) and technological application (Prescriptive Knowledge).
  • Mokyr’s insights suggest this stems from cultural and institutional weaknesses, as top institutions produce world-class research but fail to translate discoveries into market-ready innovations.
• Lack of Commercialization: Despite high publication output, India struggles to convert lab innovations into scalable industry applications. 
  • Small and medium factories still rely on decades-old machinery, reflecting a broken innovation pipeline.
• Reasons For No Industrial Revolution: India had political pluralism (Mughals, Marathas, Rajputs) and vibrant intellectual exchange in the 17th–18th centuries, with centres like Nadiadwip serving as scholarly hubs. 
  • Yet, despite these conditions, India did not experience an industrial transformation. 
• Gaps in Historical Understanding: India’s economic and intellectual history remains underexplored, with excessive focus on external factors like colonialism. 
  • Without analyzing institutional and cultural barriers to innovation, meaningful reform remains elusive.

Way Forward

• Beyond Monetary Incentives: Simply improving financial incentives or market demand will not generate sustained innovation. 
  • Knowledge ecosystems require deep institutional linkages between education, research, and industry.
• From Jugaad to Systematic Innovation: India’s culture of jugaad reflects ingenuity under constraint but lacks systemic innovation frameworks. 
  • To create transformative companies like Apple or Meta, India must merge the “What” of science with the “How” of engineering.

Conclusion

India’s knowledge economy requires reform, humility, and investment. By converting knowledge into a practical force, India can leverage its scientific and technological potential to emerge as a global innovation leader.

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