In storybooks and times of long ago, paths to prosperity took the form of treasure maps. Pirates, privateers and booty-hunters would give dearly for a map where ‘X’ marked the spot. However, when it comes to the wealth of nations, we’ve learned that gold will only get you so far. The true secret of long-lasting prosperity is much more likely to lie in the nature of knowledge – and the way it is collectively held and used within society. While classical economists have long pointed in this direction, the inherent intangibility and immeasurability of productive knowledge made quantitative and empirical explorations extremely difficult. That is, until recently.
Economic complexity approaches, which apply network analysis to trade and industry data have provided new ways to quantitatively measure countries’ productive capabilities. These developments have yielded valuable findings - shedding new light on countries’ productive structures, industrial specialization patterns, and factors underpinning a nation’s future growth.
In this talk, I investigate two new pathways forward. The first considers a new approach for conceptualizing and measuring the breadth and depth of a society’s productive knowledge. By empirically examining countries’ historical development trajectories along these two constructs, I propose that countries face knowledge quantity and quality trade-offs as they advance towards higher living standards. The second develops a new dataset of green products (goods with environmental benefits) and examines how economic complexity tools can be applied to understand capabilities important for the green economy. I explore key trends in green trade, examine how countries’ underlying productive structure shapes their ability to export green products, and present a new metric – the Green Complexity Index, which aims to measure green productive capabilities across nations.