Technological complexity and economic development

Abstract

Although technological complexity seems to be a crucial determinant of economic development, it remains insufficiently explored. Relying on microinformation stored in individual patent applications and by applying the network view of countries linked to the technologies they develop, we create a global technology space and derive complexity measures that position countries in this space. We use then the measures of technological diversification and the ubiquity of technologies present in a country's technology portfolio as an input to explain the role of technological complexity in countries' income and economic development. We show that a country's position in the global technology space affects its level of income and growth. The main channel through which it happens is the exclusiveness and uniqueness of the technological portfolio a country has, as compared to the remaining countries. K E Y W O R D S diversification, economic development, networks, specialization, technological complexity, ubiquity J E L C L A S S I F I C A T I O NO57; F1; O11; O14; O3; O4 450 | NEPELSKI aNd dE PRaTO economic growth. Second, by introducing the new measures of technological development, it extends the research on technological complexity and its economic consequences. Finally, by implementing the tool of network analysis, it creates a connection with the relatively recent attempts to introduce this perspective to study economic phenomena. Later we provide a short overview of the aforementioned strands of literature and explain the relationship with the present study.Despite a long-standing interest in the determinants of economic development and growth, causal inference drawn from the empirical evidence remains questionable, and the magnitude and robustness of estimates for a wide range of factors are still under debate. Initially, empirical research on the sources of economic growth followed two theoretical classes of models (Capolupo, 2009). The first class considers capital accumulation as the driving force behind economic growth. Here, for example, the role of capital accumulation (

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