The building blocks of economic complexity

Bibliographic Data

ID23374126
AuthorsCésar A Hidalgo (0000-0002-6031-5982, Harvard University), Raoul Hausmann (0000-0001-9284-5745, Harvard University), Ricardo Hausmann (Harvard University)
Year2009
Volume106
Issue26
Pages10570-10575
Publication date2009-06-30
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueProceedings of the National Academy of Sciences (JOURNAL)
Journal identifiersISSN: 0027-8424 • E-ISSN: 1091-6490
PublisherNational Academy of Sciences (PUBLISHER • US)
DOI10.1073/pnas.0900943106
PMID19549871
PMCIDPMC2705545
OpenAlexW1966402429
LanguageEN
Citations received476
References cited12

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.

Division of labour · Economic geography · Economic growth · Economic system · Economics · Market economy · Prosperity · Economic and Technological Innovation

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