• 2007
• Domain
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Physicist César A. Hidalgo, international development expert Bailey Klinger, physicist Albert-László Barabási, and economist Ricardo Hausmann applied theory and methods from physics and economics to model and map the impact of “The Product Space” on the development of nations. The work is based on the assumption that (1) economies grow by upgrading the products they produce and export, and (2) the technology, capital, institutions, and skills needed to make more sophisticated products are more easily adapted from some products than from others. The map depicts co-export patterns of 775 industrial products exported by 132 countries during 1998-2000. More sophisticated products are located in a densely connected core, whereas less sophisticated products occupy a rather sparse periphery. Empirically, countries move through the product space by developing goods close to those they currently produce. Most countries can reach the core only by traversing empirically infrequent distances, which may help explain why poor countries have trouble developing more competitive exports and fail to converge to the income levels of rich countries.