Canadian economist and 2025 Nobel Prize winner Peter Howitt has urged global policymakers to impose regulations on artificial intelligence (AI), warning that the rapid growth of the technology could displace millions of workers and reshape economies in unpredictable ways.
Speaking at a post-award press conference, the 79-year-old Brown University professor emeritus described AI as both a “remarkable innovation and a potential economic disruptor.” He noted that private sector incentives alone would not balance innovation with social welfare. “The private market cannot resolve this conflict in a way that benefits everyone,” Howitt said.
Howitt, recognized alongside Philippe Aghion of France and Joel Mokyr of the U.S.-Israel, received the Nobel Prize for pioneering research on “creative destruction,” an economic concept explaining how new technologies revolutionize industries while dismantling older systems.
He drew parallels between today’s AI revolution and past transformations such as the Industrial Revolution and the telecommunications boom of the 1990s. “This is a big moment in human history,” he noted. “We’ve been here before — but this time, the speed and scope of AI make it different.”
On the same day as Howitt’s address, California Governor Gavin Newsom signed SB 243, the nation’s first law regulating AI chatbots. The new law mandates that AI systems clearly disclose their nature and include child protection safeguards, marking a turning point in how governments approach AI oversight.
While Howitt emphasized the dangers of unregulated AI, co-laureate Joel Mokyr offered a more positive view. Mokyr argued that AI is not replacing humans but redefining the nature of work, opening new opportunities for creativity and problem-solving. “Machines don’t replace us; they move us to more interesting and challenging tasks,” Mokyr said.
This contrast reflects a growing debate among economists: whether AI will trigger widespread unemployment or spark a new era of productivity and innovation.
Data Suggest Stability, Despite fears of mass job losses, recent findings suggest AI’s impact on the labor market remains limited. A September 2025 report from Yale’s Budget Lab revealed that, since ChatGPT’s debut in 2022, global employment trends have remained largely stable across sectors.
However, experts warn that the most significant changes may still be ahead. Anthropic CEO Dario Amodei recently predicted that AI could eliminate up to 50% of entry-level white-collar jobs within five years, intensifying calls for workforce adaptation and retraining initiatives.
Howitt’s Nobel-winning work offers insight into how economies can navigate this transition. He insists that while innovation drives progress, regulation is essential to ensure fairness, protect workers, and maintain long-term stability.
“Creative destruction has always been part of economic evolution,” Howitt said. “But without thoughtful governance, the destruction may outweigh the creation.”
As AI continues to evolve faster than global policy frameworks, his warning echoes a crucial truth — the future of artificial intelligence depends not just on innovation, but on the wisdom and balance with which humanity wields it.
