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Measuring the intangibles: a metrics for the economic complexity of countries and products.

Cristelli M, Gabrielli A, Tacchella A, Caldarelli G, Pietronero L - PLoS ONE (2013)

Bottom Line: The fixed point of this transformation defines a metrics for the fitness of countries and the complexity of products.We argue that the key point to properly extract the economic information is the non-linearity of the map which is necessary to bound the complexity of products by the fitness of the less competitive countries exporting them.We present a detailed comparison of the results of this approach directly with those of the Method of Reflections by Hidalgo and Hausmann, showing the better performance of our method and a more solid economic, scientific and consistent foundation.

View Article: PubMed Central - PubMed

Affiliation: Physics Department, Istituto dei Sistemi Complessi - CNR, UOS Sapienza, Rome, Italy.

ABSTRACT
We investigate a recent methodology we have proposed to extract valuable information on the competitiveness of countries and complexity of products from trade data. Standard economic theories predict a high level of specialization of countries in specific industrial sectors. However, a direct analysis of the official databases of exported products by all countries shows that the actual situation is very different. Countries commonly considered as developed ones are extremely diversified, exporting a large variety of products from very simple to very complex. At the same time countries generally considered as less developed export only the products also exported by the majority of countries. This situation calls for the introduction of a non-monetary and non-income-based measure for country economy complexity which uncovers the hidden potential for development and growth. The statistical approach we present here consists of coupled non-linear maps relating the competitiveness/fitness of countries to the complexity of their products. The fixed point of this transformation defines a metrics for the fitness of countries and the complexity of products. We argue that the key point to properly extract the economic information is the non-linearity of the map which is necessary to bound the complexity of products by the fitness of the less competitive countries exporting them. We present a detailed comparison of the results of this approach directly with those of the Method of Reflections by Hidalgo and Hausmann, showing the better performance of our method and a more solid economic, scientific and consistent foundation.

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Related in: MedlinePlus

Graphical representation of the experimental Mcp matrix for the year 2010 after reordering of rows and columns by respectively decreasing F*c and increasing Q*p .It is evident the substantial triangular structure of the matrix even more pronounced than in the case of a reordering of rows and columns in terms of and .
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pone-0070726-g004: Graphical representation of the experimental Mcp matrix for the year 2010 after reordering of rows and columns by respectively decreasing F*c and increasing Q*p .It is evident the substantial triangular structure of the matrix even more pronounced than in the case of a reordering of rows and columns in terms of and .

Mentions: The main idea is, as aforementioned, that while the fitness of a country is indeed defined by the sum of the complexities of its products, the complexity of a product is bounded by the development of the poorly diversified producers. This idea originates from the triangular structure (as shown in Fig. 4 where we ordered countries according to the fitness we compute) of the country-product matrix .


Measuring the intangibles: a metrics for the economic complexity of countries and products.

Cristelli M, Gabrielli A, Tacchella A, Caldarelli G, Pietronero L - PLoS ONE (2013)

Graphical representation of the experimental Mcp matrix for the year 2010 after reordering of rows and columns by respectively decreasing F*c and increasing Q*p .It is evident the substantial triangular structure of the matrix even more pronounced than in the case of a reordering of rows and columns in terms of and .
© Copyright Policy
Related In: Results  -  Collection

Show All Figures
getmorefigures.php?uid=PMC3733723&req=5

pone-0070726-g004: Graphical representation of the experimental Mcp matrix for the year 2010 after reordering of rows and columns by respectively decreasing F*c and increasing Q*p .It is evident the substantial triangular structure of the matrix even more pronounced than in the case of a reordering of rows and columns in terms of and .
Mentions: The main idea is, as aforementioned, that while the fitness of a country is indeed defined by the sum of the complexities of its products, the complexity of a product is bounded by the development of the poorly diversified producers. This idea originates from the triangular structure (as shown in Fig. 4 where we ordered countries according to the fitness we compute) of the country-product matrix .

Bottom Line: The fixed point of this transformation defines a metrics for the fitness of countries and the complexity of products.We argue that the key point to properly extract the economic information is the non-linearity of the map which is necessary to bound the complexity of products by the fitness of the less competitive countries exporting them.We present a detailed comparison of the results of this approach directly with those of the Method of Reflections by Hidalgo and Hausmann, showing the better performance of our method and a more solid economic, scientific and consistent foundation.

View Article: PubMed Central - PubMed

Affiliation: Physics Department, Istituto dei Sistemi Complessi - CNR, UOS Sapienza, Rome, Italy.

ABSTRACT
We investigate a recent methodology we have proposed to extract valuable information on the competitiveness of countries and complexity of products from trade data. Standard economic theories predict a high level of specialization of countries in specific industrial sectors. However, a direct analysis of the official databases of exported products by all countries shows that the actual situation is very different. Countries commonly considered as developed ones are extremely diversified, exporting a large variety of products from very simple to very complex. At the same time countries generally considered as less developed export only the products also exported by the majority of countries. This situation calls for the introduction of a non-monetary and non-income-based measure for country economy complexity which uncovers the hidden potential for development and growth. The statistical approach we present here consists of coupled non-linear maps relating the competitiveness/fitness of countries to the complexity of their products. The fixed point of this transformation defines a metrics for the fitness of countries and the complexity of products. We argue that the key point to properly extract the economic information is the non-linearity of the map which is necessary to bound the complexity of products by the fitness of the less competitive countries exporting them. We present a detailed comparison of the results of this approach directly with those of the Method of Reflections by Hidalgo and Hausmann, showing the better performance of our method and a more solid economic, scientific and consistent foundation.

Show MeSH
Related in: MedlinePlus