Development, Innovation, Complexity. New metrics for long run growth.

Abstract

Wealth and income are extremely unevenly distributed among nations and regions. This depends largely of unequal accumulation of productive knowledge, which has taken place in some parts of the world and not in others. The aim of this Thesis is to understand the factors influencing nation’s economic growth and development. Why some countries are richer than others? Most theorists recognize the idea that change and diversity are essential features that governs the economic growth. Development is about the accumulation of very large set of capabilities that will allow countries to make a large range of possible products, and as a result becoming more competitive and diversified. Meanwhile, goods that require high skills and knowhow are going to be harder to produce and as a consequence only a small niche of countries will be able to make them. This process, however, is complex and often problematic as industries cannot exist in places where productive knowledge is absent, consequently accumulating even modest fragments of productive knowledge will make no sense in places where industries are not present. This vicious cycle, slows down and often impede the enlargement of knowledge and creation of new competences. It also condemns countries to uniform and standardize their economic activities. This paper aims to find those factors and territorial dynamics, that characterize the development paths and which will help nations to outline their competitive advantages but at the same time trigger virtuous processes of diversification and innovation. The significant message is the creation of a context where a greater diversity of productive activities can succeed and especially of products that are relatively more complex in all nations.