My notes from Dec 2011…
This “Atlas” was published in late 2011 and uses the concept of a “complexity index” and the use of a “product space” to represent some key features of an economy.
The Atlas of Complexity has some potentially interesting aims, which in part mirror my desire to communicate the interconnectivity of large [economic] systems. I like the idea, but I think, at this early stage, it overstates it’s own capability and usefulness. From what I’ve read so far, they are still developing e.g. the Economic Complexity Index is only derived from exported goods data, because this was readily available for a wide range of countries. The danger is that other claims on correlations and usefulness of ECI and various visualisations, could seem rather tenuous if you take limitations into account.
The word “complexity” is used here to reflect the amount of combined knowledge (explicit and tacit) and capability used to bring a product to the point of consumption (in this case, export). I would argue that this is essentially some measure of “value”.
For me the use of “complexity” is the wrong term. Hand in hand with complexity and complex systems comes unpredictability and “chaos”, which is not what they are trying to imbue. I think they really mean something the depth and maturity of knowledge (even history) and capability needed to bring a product to life, which needn’t itself be complex. Terms like “Knowledge Maturity”, “Implicit Value” … answers on a postcard.
There are (on the face of it) other issues in it’s current form:
– Assumes that the “country” is the useful scope for comparison, when dealing with products. It does not take account of knowledge within international organisations, where the long value streams and networks can cross and re-cross boundaries, and, even tacit knowledge can be disseminatedmore readily.
– In many economies, services form the greater part of the economy. Even if the service embodies “knowledge” held within the “complexity” (or value) of a product, they have failed to represent the whole economy.
– Export: the argument goes, well if they don’t export something, it’s probably not worth exporting so can be ignored. If an economy is sufficiently large, it can often develop knowledge and capability in a product predominantly (quantity) to serve the domestic market e.g. USA, soon China
I do however accept (and it confirms some of my propositions) that complexity needs to be represented and, in part, understood by policy makers. This atlas is indeed one way of representing it….Watch this space.
Fig 1. The UK’s “Product Space” with Economic Complexity Index
NB. This session was run from the Institute of Government (UK)
JAH Dec 2011