Do brands create growth - or do they slow it down?

This year's Nobel Prize in Economic Sciences was awarded to Philippe Aghion, together with two other scientists. His work focuses on growth through innovation, or more precisely: how "creative destruction" enables sustainable growth and greater prosperity for society as a whole (and does not, as Schumpeter assumed, lead to disruptions in the economy). Among other things, Aghion also addresses the behavior of earlier innovators: they use the monopoly profits of their now threatened innovations to fend off new innovators. How do they do this?

Aghion primarily mentions lobbying here - but of course brand building is also a path that previous innovators regularly take. This is because the well-known and proven brand discourages customers from trying out the new product. Are brands therefore a problem for economic growth and should they be regulated? We don't think so. If you study Interbrand's ranking of the world's most valuable brands over the years, you will see that brands, like innovation, are under constant threat of creative destruction.

What brands do, however, is buy the former innovators some time to become innovative again - to destroy their former innovation themselves, so to speak. This, in turn, is necessary if companies want to survive in the long term, and is particularly evident in the generational change in SMEs.

And if you want to hear more from Phillipe Aghion (it's worth it):https://www.youtube.com/watch?v=d5_f1ij8q2o