A fast way to evaluate business opportunities in a country - a novel approach by MIT

Prof. Hidalgo of MIT presented last Thursday, October 4th at the MIT Agoria 2012 Conference held in Brussels his Atlas of Economic Complexity. This novel approach of Prof. Hidalgo and his team clusters countries and their range of export products to get fascinating insights in the innovation and growth potential of these countries on a medium term.

The model is based upon a first hypothesis that countries which produce more diversified and less ubiquitous products dispose of a richer palette of innovation and economical growth means. Based upon a second hypothesis that sectoral growth and innovation in a country spreads through adjacent sectors, the atlas allows to draw strong insights in countries.

GDP per capita (vertical axis) vs. Index of economic complexity (horizontal axis). In red, countries that export natural resources. In blue, countries without important natural resources

GDP per capita (vertical axis) vs. Index of economic complexity (horizontal axis). In red, countries that export natural resources. In blue, countries without important natural resources.

Ranking list of countries with the highest growth potential according to the Index of economic complexity

Ranking list of countries with the highest growth potential according to the Index of economic complexity.

Furthermore, the Atlas of Economic complexity makes the sectoral industry clustering of a country very visible and comparable. Maps allow to identify preferential axes of sectoral innovation in the medium term to sectors adjacent to existing sectors. This can be a guide for developing the best adapted regional or sectoral approach by public authorities.

Sectoral clustering of products visualized as percentage of industrial GDP (left) and relationships between sectors through clustering (right) for South Korea in 2010

Sectoral clustering of products visualized as percentage of industrial GDP (left) and relationships between sectors through clustering (right) for South Korea in 2010.

You will find the interactive data platform on the website of the MIT: http://atlas.media.mit.edu/.