The building blocks of economic complexity
Open accessAbstract
For Adam Smith, wealth was related to the division of labor. As people and firms specialize in different activities, economic efficiency increases, suggesting that development is associated with an increase in the number of individual activities and with the complexity that emerges from the interactions between them. Here we develop a view of economic growth and development that gives a central role to the complexity of a country's economy by interpreting trade data as a bipartite network in which countries are connected to the products they export, and show that it is possible to quantify the complexity of a country's economy by characterizing the structure of this network. Furthermore, we show that the measures of complexity we derive are correlated with a country's level of income, and that deviations from this relationship are predictive of future growth. This suggests that countries tend to converge to the level of income dictated by the complexity of their productive structures, indicating that development efforts should focus on generating the conditions that would allow complexity to emerge to generate sustained growth and prosperity.
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- Authors
- Hidalgo, C. A., & Hausmann, R.
- Affiliations
- Harvard University (US)
- Venue
- Proceedings of the National Academy of Sciences
- Publisher
- National Academy of Sciences
- Published
- 2009-06-30
- Volume
- 106
- Issue
- 26
- Pages
- 10570-10575
- ISSN
- 0027-8424 (ISSN-L)
- 1091-6490
- PMC
- PMC2705545
- OpenAlex
- W1966402429
- Cited by
- 3,372
- References
- 0
- Citations by year
- 2026: 385 · 2025: 379 · 2024: 390 · 2023: 428 · 2022: 332 · 2021: 346 · 2020: 238 · 2019: 179 · 2018: 173 · 2017: 148 · 2016: 88 · 2015: 82 · 2014: 61 · 2013: 57 · 2012: 44
- FWCI
- 62.89
- Type
- journal article
- Language
- en
- Open access
- green
- www.ncbi.nlm.nih.gov
- Locations
- Proceedings of the National Academy of Sciences (publishedVersion)
- PubMed Central (publishedVersion)
- PubMed (publishedVersion)
- Digital Access to Scholarship at Harvard (DASH) (Harvard University) (acceptedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- arXiv (Cornell University) (submittedVersion)
- arXiv (Cornell University)
- Funders
- Harvard Kennedy School
- Topics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Economic and Technological Innovation
- Physical Sciences › Physics and Astronomy › Statistical and Nonlinear Physics › Complex Network Analysis Techniques
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Complex Systems and Time Series Analysis
- Keywords
- economic complexity, bipartite graphs, trade networks, export structure, economic growth, economic development, income convergence, specialization, network centrality
- MeSH terms
- Algorithms, Commerce, Developing Countries, Humans, Industry, International Cooperation, Models, Economic, Developed Countries
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