The ECI was developed by Cesar A. Hidalgo, from the MIT Media Lab and Ricardo Hausmann, from Harvard University's Kennedy School of Government. ECI data is available in The Observatory of Economic Complexity. The original formulation of the economic complexity index was published in PNAS in 2009.1
In its strict mathematical definition, the ECI is defined in terms of an eigenvalue of a matrix connecting countries to countries, which is a projection of the matrix connecting countries to the products they export. Since the ECI considers information on the diversity of countries and the ubiquity of products, it is able to produce a measure of economic complexity containing information about both the diversity of a country's exports and their sophistication. For example, Japan or Germany, with high ECIs, export many goods that are less common and that are produced by highly diversified countries, indicating that these are diverse and sophisticated economies. Countries with low ECI, like Angola or Botswana, export only a few products, which are of relatively high ubiquity and which are exported by countries that are not necessarily very diversified, indicating that these are countries that have little diversity and that the products that they export are not very sophisticated.
Hidalgo and Hausmann propose the concept of ECI not only as a descriptive measure, but also as a predictive tool for economic growth and income inequality. According to the statistics models presented in their Atlas of Economic Complexity (2011),2 the ECI is a more accurate predictor of GDP per capita growth than traditional measures of governance, competitiveness (World Economic Forum's Global Competitiveness Index) and human capital (as measured in terms of educational attainment). ECI also shows a strong negative correlation with income inequality, suggesting that more knowledge intense productive structures are more inclusive in terms of income distribution, and providing a statistically more powerful explanation of cross-national variations in income inequality than Kuznets Curve.3
Economic development requires the accumulation of productive knowledge and its use in both more and more complex industries. According to this metric, many low-income countries, including Bangladesh, Venezuela, and Angola have failed to diversify their know-how and face low growth prospects while those like India, Turkey, and the Philippines have added productive capabilities to enter new sectors and are expected by some drive growth over the coming years.4
The Economic Complexity Index was initially developed using trade data but its application has expanded to include other data sources, such as patents5 and scientific publications,6 enabling a broader examination of economic and innovation ecosystems.
Main article: List of countries by economic complexity
Country Complexity Rankings 7
(2018 vs 2023)
Cesar A. Hidalgo, Ricardo Hausmann (2009). "The Building Blocks of Economic Complexity". Proceedings of the National Academy of Sciences. 106 (26). PNAS: 10570–10575. arXiv:0909.3890. Bibcode:2009PNAS..10610570H. doi:10.1073/pnas.0900943106. PMC 2705545. PMID 19549871. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2705545 ↩
Ricardo Hausmann, Cesar Hidalgo; et al. "The Atlas of Economic Complexity". Puritan Press, Cambridge MA. Archived from the original on 18 May 2012. Retrieved 26 April 2012. https://web.archive.org/web/20120518210853/http://atlas.media.mit.edu/book/ ↩
Dominik Hartmann, Miguel Guevara, Cristian Jara-Figueroa, Manuel Aristaran, Cesar Hidalgo (2018), "Linking Economic Complexity, Institutions, and Income Inequality", World Development, 93: 75–93, arXiv:1505.07907, doi:10.1016/j.worlddev.2016.12.020, S2CID 45386522{{citation}}: CS1 maint: multiple names: authors list (link) https://www.sciencedirect.com/science/article/abs/pii/S0305750X15309876 ↩
"India tops list of fastest growing economies for coming decade: Harvard study". The Economic Times. 2020-05-04. Retrieved 2020-10-31. https://economictimes.indiatimes.com/news/economy/indicators/india-tops-list-of-fastest-growing-economies-for-coming-decade-harvard-study/articleshow/64027625.cms ↩
Balland, Pierre-Alexandre; Rigby, David (January 2017). "The Geography of Complex Knowledge". Economic Geography. 93 (1): 1–23. doi:10.1080/00130095.2016.1205947. ISSN 0013-0095. https://www.tandfonline.com/doi/full/10.1080/00130095.2016.1205947 ↩
Balland, Pierre-Alexandre; Jara-Figueroa, Cristian; Petralia, Sergio G.; Steijn, Mathieu P. A.; Rigby, David L.; Hidalgo, César A. (March 2020). "Complex economic activities concentrate in large cities". Nature Human Behaviour. 4 (3): 248–254. arXiv:1807.07887. doi:10.1038/s41562-019-0803-3. ISSN 2397-3374. https://www.nature.com/articles/s41562-019-0803-3 ↩
"ECI Rankings (HS96)". The Observatory of Economic Complexity. Retrieved 2025-03-15. https://oec.world/en/rankings/eci/hs6/hs96?tab=table ↩
"Complexity rankings The Observatory of Economic Complexity". OEC. Archived from the original on 2023-10-28. Retrieved 2023-05-02. https://web.archive.org/web/20231028065145/https://oec.world/en/rankings/eci/hs6/hs96?tab=table ↩