And with that, it's my pleasure to invite Philippe to the lecture.

you so much it's a great honor and thanks so much to be with us but I think the great initiative that you are launching at the LSE I think we make a big difference so and I want to stress how important LSE has been for me since I came back 11 years ago time flies and blossoming at the LSE so Nothing great would have happened last year without LSE support again.

So I will talk about AI.

But before that, I will just tell you a bit who, you know, where I come from.

So here is, that's not me, that's Joseph Schumpeter.

And Schumpeter is known to have coined the term creative destruction before.

whereby he meant the process whereby new innovations displace old technologies.

Now, back to the event.

Mm-hmm.

And then you can say, "Well, you know, I can diffuse also to, uh, uh, uh, you know, imitation may also become easier." You're absolutely right.

Here we're just talking about the production of ideas.

But of course, beyond that, Markus, there is the diffusion process.

Okay.

So for example, so take a basic Zira, Joseph Zira model, where you produce, uh, uh, GDP with, uh, with, you know, various inputs, uh, X one, Xn, and those inputs themselves, you can produce them with labor if the, uh, corresponding task has not been automated or with capital if the, uh, corresponding tasks have been automated.

And let capital L denote the sum of Li's and capital K denote the sum of Ki's.

Mm-hmm.

Can everybody get there? That's the question.

I think everybody can do something.

It's true that it was luck in a sense that the price was decided in 2025 because we are in the debate on AI.

We are in the debate on green growth.

We are in the debate of the European decline vis-a-vis US and China.

How can we, the Draghi report, you see, and how can we revert course? And so we are at the intersection of all those debates and the price came exactly at the moment, at the optimal moment, you see, where all those debates are very hot.

That's what makes it so exciting.

How do you bring everybody along with you? How do you prevent it becoming a very unequal distribution of progress? Yeah.

And Philippe, again, thanks a lot for doing that and for being with us and, um, bringing your wisdom to us on particular on these questions you have so much expertise on.

Uh, uh, Markus, thanks so much, uh, for all these questions.

I wrote them down, and, uh, I hope to do justice to at least some of them.

And, uh, I will try to make sure that I, uh, at least I, I, I, I, I deal with them, you know, at least I, I touch upon them.

And, uh, uh, each of them would require [laughs] a whole lecture.

Uh, so thanks very much.

It's a great pleasure to, uh, to, to, uh, to present at this, uh, webinar.

How, how, how do you see the interaction between the two? Because there's a plus and there's a minus.

Yeah

YeahIt will re- but it will also create new jobs, because new ideas are new jobs.

And firms that adopt AI become more productive, therefore more competitive, and therefore the world market demand for their products increases.

So the whole thing is to manage the job destruction and job creation.

That's where you need the flexicurity system.

Mm-hmm.

Of course.

You need, of course, a smart immigration policy, which you, you g- you, you have the tools to manage it.

Philippe, your view on creative destruction and whether we should embrace it or fight it?

So I will build on what Peter just very well explained.

So our growth model is a model where growth is driven by the fact that you have constantly new innovators, new talents coming in, entering the market.

They challenge yesterday's innovators.

They enter and innovate because they think they will get some rents from innovating, of course, and we want to let them get those rents and grow if they innovate.

The problem, of course, is once they've grown, they may be tempted to use their rents, as was well explained, to prevent subsequent waves of innovators.

So, you see, at the basis of this paradigm, there is a contradiction.

I mean, do you see that as being creative destruction or do you see that as being the roadblocks to further creative destruction?