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Productive Ecosystems and the arrow of development

O’Clery, N; Yıldırım, MA; Hausmann, R; (2021) Productive Ecosystems and the arrow of development. Nature Communications , 12 (1) , Article 1479. 10.1038/s41467-021-21689-0. Green open access

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Abstract

Economic growth is associated with the diversification of economic activities, which can be observed via the evolution of product export baskets. Exporting a new product is dependent on having, and acquiring, a specific set of capabilities, making the diversification process path-dependent. Taking an agnostic view on the identity of the capabilities, here we derive a probabilistic model for the directed dynamical process of capability accumulation and product diversification of countries. Using international trade data, we identify the set of pre-existing products, the product Ecosystem, that enables a product to be exported competitively. We construct a directed network of products, the Eco Space, where the edge weight corresponds to capability overlap. We uncover a modular structure, and show that low- and middle-income countries move from product communities dominated by small Ecosystem products to advanced (large Ecosystem) product clusters over time. Finally, we show that our network model is predictive of product appearances.

Type: Article
Title: Productive Ecosystems and the arrow of development
Open access status: An open access version is available from UCL Discovery
DOI: 10.1038/s41467-021-21689-0
Publisher version: https://doi.org/10.1038/s41467-021-21689-0
Language: English
Additional information: This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license, and indicate if changes were made. The images or other third party material in this article are included in the article’s Creative Commons license, unless indicated otherwise in a credit line to the material. If material is not included in the article’s Creative Commons license and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this license, visit http://creativecommons.org/licenses/by/4.0/.
Keywords: Developing world, Economics, Environmental economics, Industry
UCL classification: UCL
UCL > Provost and Vice Provost Offices > UCL BEAMS
UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of the Built Environment
UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of the Built Environment > Centre for Advanced Spatial Analysis
URI: https://discovery.ucl.ac.uk/id/eprint/10123569
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