Economic Complexity Index and Country Performance

One of the growing forces in our understanding of what drives growth in different countries is the Harvard and MIT designed Economic Complexity Index (ECI). According to Harvard's Atlas of Economic Complexity, ECI is "a measure of the knowledge in a society that gets translated into the products it makes. The most complex products are sophisticated chemicals and machinery, whereas the world’s least complex products are raw materials or simple agricultural products. The economic complexity of a country is dependent on the complexity of the products it exports. A country is considered ‘complex’ if it exports not only highly complex products (determined by the PRODUCT COMPLEXITY INDEX), but also a large number of different products."

Below is a motion chart showing the ECI and country rankings against measures of economic performance, namely GDP per person. The default graph setting has real GDP per capita on the x axis (the further right the richer a country is) and ECI rank on the y axis (the lower the more complex a country is). Bubble size is nominal GDP per capita. One can see that in 1964, Denmark, Norway, and Sweden had the highest GDP per person and correspondingly complex economies as shown by their rankings. On the lower end were Gabon, Sudan, and Nigeria, which ranked 97, 95, and 94th in economic complexity. Select these 6 countries on the bottom right menu and follow their progress in economic complexity and GDP. You will observe that initially complex countries tend to grow fast while initially less complex ones generally remained poor. Resource rich countries are the exception to the rule (high per capita incomes despite less complex economies).