Integrating Services in the Economic Fitness Approach
Economic Complexity is a set of network-based and algorithmic methods for the study of economic development and competitiveness. In this framework, Economic Fitness is an innovative approach that improves the mathematical and conceptual scheme. For...
| Main Authors: | , , , |
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| Language: | English |
| Published: |
World Bank, Washington, DC
2018
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/309521529586431853/Integrating-services-in-the-economic-fitness-approach http://hdl.handle.net/10986/29938 |
| Summary: | Economic Complexity is a set of
network-based and algorithmic methods for the study of
economic development and competitiveness. In this framework,
Economic Fitness is an innovative approach that improves the
mathematical and conceptual scheme. For convenience, these
methods were originally conceived on trade in goods. This
paper extends the Economic Fitness methodology to include a
trade in services element to yield a universal matrix of
world trade and thus provide a more complete picture of a
country's development and global competitiveness. The
paper applies two algorithms to the universal trade in goods
and services matrix to contrast country competitiveness and
change in complexity and diversification when services are
added to the traditional goods-only matrix. The results show
that (i) the competitiveness of many countries was
previously over- or underestimated, that is, many countries
gain or lose positions in the ranking of economic fitness
when services trade is considered alongside goods; and (ii)
complex services tend to cluster with complex manufacturing,
suggesting a common capabilities structure. These findings
show how developing complex services aids diversification
strategies for developing countries. |
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