Sit Back And Enjoy These Stunning Charts On The Rise Of Manufacturing Complexity

economic complexity

Photo: Atlas of Economic Complexity

The products we use everyday are complex combinations of specialised knowledge.Harvard and MIT released a report, “The Atlas of Economic Complexity,” visually mapping the vast knowledge contained within the products we use. And then they show how complex products benefit a country’s economy and growth.

Simple products are natural resources that require less people with specialised knowledge, such as oil or soybeans.

Complex products require many people with specialised knowledge to research, design, develop, and invent, such as cars and computers.

Each person with specialised knowledge is a personbyte. Add these people together to get peoplebytes. Get the the right mix of peoplebytes, and a country’s Economic Complexity Index (ECI) increases, as well as their economy and contribution to global growth.

A colour coded web shows how knowledge contained in products is inter-related. Items near the middle are more complex, such as machinery. Items closer to the edges are simpler, such as cereals.

Diversity is the different things a country can make; high ECI countries have good diversity. Ubiquity is how many countries can make a product; ubiquitous products are simple products.

A map of ECI in 2008 shows that USA and Europe rank high, while Africa brings up the rear.

Machines and appliances are the most complex products. Natural resources and crops are the least complex.

An example of measuring product complexity. Netherlands is the only producer of x-rays and medicaments, the most complex product here. It is one of two countries producing cheese and creams. And it is one of three countries that can produce fish.

A ranking of how ECI changes over the years lists Switzerland at #1 in 1964, and Libya at #101.

By 2008, Japan became #1. The US also fell from 7th to 11th. And, Sudan has fallen into last place.

A map of ECI improvements shows that Latin America, Sub-Saharan Africa, and Asia are all on the rise.

A sample of evolving ECI in different countries. Ghana developed their fishing industry; Poland improved construction; Thailand shifted from textiles to electronics; and Turkey expanded from textiles to construction and into machinery.

Education is a key factor in increasing a country's ECI.

Cognitive ability is also important, although not as much as school.

The US is projected to contribute the most to global growth by 2020, 22.41%. China is second, contributing 14.21% to global growth by 2020.

The US produced and exported almost every type of product except clothing in 2008.

Cars, vehicles, and parts made up most of the US's exports

Japan, the ECI leader in 2008, is an even bigger exporter of cars and car parts than the US. It is also exports a lot of electronics.

Mauritius improved ECI the most, rising from 100th to 58th. It shifted from purely farming to the textile manufacturing and fishing industries.

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.