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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

Time evolution of the product complexity from 1995 to 2010 for a selection of cereals which result to be organized into two main groups.The former group has an average complexity around the average complexity of all products, Q∼1, the latter one is composed of cereals whose level of sophistication is much lower than the previous as measured by our metrics, Q∼10−3, 10−4). By analyzing the typical typical usage of oats and rye we find that these two cereals are not typical of a substance economic system since they are used in livestock industry and brewed-product industry.
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pone-0070726-g011: Time evolution of the product complexity from 1995 to 2010 for a selection of cereals which result to be organized into two main groups.The former group has an average complexity around the average complexity of all products, Q∼1, the latter one is composed of cereals whose level of sophistication is much lower than the previous as measured by our metrics, Q∼10−3, 10−4). By analyzing the typical typical usage of oats and rye we find that these two cereals are not typical of a substance economic system since they are used in livestock industry and brewed-product industry.

Mentions: As an example, in Fig. 11 we show the time evolution of the complexity for a selection of cereals from 1995 to 2010. Cereals result to be organized into two main groups: the former has an average complexity around the average complexity of all products (i.e. ), while the latter is formed of cereals whose level of sophistication is much lower than the previous as measured by our metrics (i.e. ). Given this observation, among cereals, our method reveals two different complexity regimes for cultivation. In order to verify if the two classes correspond to a real difference in the level of technology of the country exporting them we analyze the typical usage of oats and rye. Supporting the finding that these two cereals are not typical of a substance economic system, we find that they are used in livestock industry and brewed-product industry.


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)

Time evolution of the product complexity from 1995 to 2010 for a selection of cereals which result to be organized into two main groups.The former group has an average complexity around the average complexity of all products, Q∼1, the latter one is composed of cereals whose level of sophistication is much lower than the previous as measured by our metrics, Q∼10−3, 10−4). By analyzing the typical typical usage of oats and rye we find that these two cereals are not typical of a substance economic system since they are used in livestock industry and brewed-product industry.
© Copyright Policy
Related In: Results  -  Collection

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

pone-0070726-g011: Time evolution of the product complexity from 1995 to 2010 for a selection of cereals which result to be organized into two main groups.The former group has an average complexity around the average complexity of all products, Q∼1, the latter one is composed of cereals whose level of sophistication is much lower than the previous as measured by our metrics, Q∼10−3, 10−4). By analyzing the typical typical usage of oats and rye we find that these two cereals are not typical of a substance economic system since they are used in livestock industry and brewed-product industry.
Mentions: As an example, in Fig. 11 we show the time evolution of the complexity for a selection of cereals from 1995 to 2010. Cereals result to be organized into two main groups: the former has an average complexity around the average complexity of all products (i.e. ), while the latter is formed of cereals whose level of sophistication is much lower than the previous as measured by our metrics (i.e. ). Given this observation, among cereals, our method reveals two different complexity regimes for cultivation. In order to verify if the two classes correspond to a real difference in the level of technology of the country exporting them we analyze the typical usage of oats and rye. Supporting the finding that these two cereals are not typical of a substance economic system, we find that they are used in livestock industry and brewed-product industry.

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