Become complex or stay poor

Gazing into crystal balls and predicting the economic future of countries has become one of the fastest-growing industries in academia. Institutions like the World Bank, the World Economic Forum and countless experts are all at it – crunching numbers and graphs to peer into the future. Now Harvard University has come up with a controversial system that predicts growth patterns on how complex a society or an industry is – and some of the results they have arrived at are startling. Richard Walker reveals all.


Stop worrying about how rich you are. Stop thinking about annual income as the main measure of your economic status and future prospects. Stop focusing on the industries you already have today. Instead, start thinking about how complex your economy is, and particularly on how much knowledge it needs to run. That is the message to African economists and policy makers from an influential economic research database sponsored by Harvard University, called the Atlas of Economic Complexity.

The Harvard Atlas is all about predicting which countries will see growing productive economies in the coming years. The Harvard economists claim that the Atlas, which ranks countries according to their growth potential, can predict growth patterns better than other rankings. The Atlas has already been shown to be more effective at predicting growth than the World Bank indicators on governance, the World Economic Forum’s competitiveness indicators, or other rankings based on education or on the availability of finance.

The Harvard project is led by the renowned Venezuelan development economist Professor Ricardo Hausmann. In a recent interview Hausmann summarised the conclusions: “We take two measures. How much a country knows, and how easy would it be for it to know more. Together those variables can predict how fast it will grow. Not just the country as a whole – we can predict how fast an industry can grow in a given location. We can predict the complete appearances and disappearances of industries, and the results are five to 10 times more accurate than random guesses.’

The most important insight of the Atlas is that it is not just human or infrastructural resources that determine future growth, but complexity. And when you look at economies through the lens of complexity, it turns out that some of the countries that are commonly thought of as excellent investment bets turn out not to have such a bright future after all – while others commonly thought of as basket cases could be the strongest performers of the future.

Take two Southern African countries that happen to be neighbours, that both have a heritage of British colonial rule, and that also have some culture and languages in common.

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