A new metric for countries’ fitness and products’ complexity

A. Tacchella, M. Cristelli, G. Caldarelli, A. Gabrielli, L. Pietronero

Scientific Reports 2, 723 (2012)

#economiccomplexity #networktheory #innovation

A snapshot of the bipartite network for the most important countries; size of vertices is the fitness and the complexity

Classical economic theories prescribe specialization of countries industrial production. Inspection of the country databases of exported products shows that this is not the case: successful countries are extremely diversified, in analogy with biosystems evolving in a competitive dynamical environment. The challenge is assessing quantitatively the non-monetary competitive advantage of diversification which represents the hidden potential for development and growth. Here we develop a new statistical approach based on coupled non-linear maps, whose fixed point defines a new metrics for the country Fitness and product Complexity. We show that a non-linear iteration is necessary to bound the complexity of products by the fitness of the less competitive countries exporting them. We show that, given the paradigm of economic complexity, the correct and simplest approach to measure the competitiveness of countries is the one presented in this work. Furthermore our metrics appears to be economically well-grounded.