2,000 Years of Economic History in One Chart 09-14

All major powers compared by GDP from the year 1 AD

The Chart of the Week is a weekly Visual Capitalist feature on Fridays.

Long before the invention of modern day maps or gunpowder, the planet’s major powers were already duking it out for economic and geopolitical supremacy.

Today’s chart tells that story in the simplest terms possible. By showing the changing share of the global economy for each country from 1 AD until now, it compares economic productivity over a mind-boggling time period.

Originally published in a research letter by Michael Cembalest of JP Morgan, we’ve updated it based on the most recent data and projections from the IMF. If you like, you can still find the original chart (which goes to 2008) at The Atlantic. It’s also worth noting that the original source for all the data up until 2008 is from the late Angus Maddison, a famous economic historian that published estimates on population, GDP, and other figures going back to Roman times.

A Major Caveat

If you looked at the chart in any depth, you probably noticed a big problem with it. The time periods between data points aren’t equal – in fact, they are not close at all.

The first gap on the x-axis is 1,000 years and the second is 500 years. Then, as we get closer to modernity, the chart uses mostly 10 year intervals. Changing the scale like this is a big data visualization “no no”, as rightly pointed out in a blog post by The Economist.

While we completely agree, we have a made an exception in this case. Why? Because getting good economic data from the early 20th century is already difficult enough – and so trying to find data in regular intervals before then seems like a fool’s errand. Likewise, a stacked bar chart with different years also doesn’t really do this story justice.

We encountered similar historical data issues in our Richest People of Human History graphic, and at the end of the day decided it was primarily for fun. Like today’s chart, it has its share of imperfections – but ultimately, it provides a great amount of context and serves as a conversation starter.

Our Interpretation

Caveats aside, there are many stories that materialize from this simple chart. They include the colossal impact of the Industrial Revolution on the West, as well as the momentum behind the re-emergence of Asia.

But there’s one other story that ties it all together: the exponential rate of human economic growth that occurred over the last century.

                                                                                                                                                                 

For thousands of years, economic progress was largely linear and linked to population growth. Without machines or technological innovations, one person could only produce so much with their time and resources.

More recently, innovations in technology and energy allowed the “hockey stick” effect to come into play.

It happened in Western Europe and North America first, and now it’s happening in other parts of the world. As this technological playing field evens, economies like China and India – traditionally some of the largest economies throughout history – are now making their big comeback.

Editor’s note: We have adjusted the main graphic as of Sep 10, 2017 to change the description of the chart. It now says “Share of GDP (World Powers)” instead of the previous “Share of world GDP”, which was technically an inaccurate description.

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India ranks sixth on eight great powers in 2017: magazine 01-27

India is ranked at the sixth spot, behind China and Japan, in a list of eight great powers for the year 2017 by a leading American foreign policy magazine which is topped by the US. The list is topped by the US, whereas Chin and Japan are at tie for being on the second spot. Russia (fourth) and Germany (fifth) are the other two countries ahead of India. Iran is ranked seventh and Israel is on the eighth spot. "Like Japan, India is often overlooked in lists of the world's great powers, but it occupies a rare and enviable position on the world stage," The American Interest magazine said in its latest annual report of eight great powers.

India is the world's largest democracy, home to the second-largest English-speaking population in the world and boasting a diversified and rapidly growing economy, it said. On the geopolitical front, India has many suitors: China, Japan and the United States are all seeking to incorporate India into their preferred Asian security architecture, while the EU and Russia court New Delhi for lucrative trade and defence agreements, it noted. "Under the leadership of Prime Minister Narendra Modi, India has deftly steered its way among these competing powers while seeking to unleash its potential with modernising economic reforms," it said.

According to the magazine, despite internal problems in the aftermath of demonetisation, and the Pakistan scare, India found its footing elsewhere in 2016. "Long hesitant to pick sides, New Delhi took several clear steps this year to deter a rising and aggressive China, announcing that it would fast-track its defence infrastructure projects in the Indian Ocean, amid fears that China was trying to encircle India with a 'string of pearls'," it said.

"Likewise, Modi explored new naval cooperation with both the US and Japan, and signed a host of defence deals with Russia, France and Israel to modernise the Indian military," it observed. "From the Middle East and East Africa to Southeast Asia, India is making its presence felt in both economics and security policy in ways that traditional great powers like Britain and France only wish they could match," The American interest said.

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Engaging With Startups in Emerging Markets 01-22

Startups in developing economies are addressing local problems through creative technologies and solutions. For large global companies, the prospect of working with such startups is appealing — and complicated.

 

For large global companies, forging effective partnerships with high-potential startups is easier said than done. The very traits that make such startups potentially complementary as partners also make it difficult for large companies to engage with them in the first place. Multinational corporations often struggle even to identify promising potential startup partners; startups, for their part, find it difficult to identify and reach the relevant decision makers within the often-confusing hierarchies of gigantic multinational companies.

The challenge, for both sides, is all the more vexing in emerging markets. Furthermore, most academic studies of the challenges that large companies and entrepreneurial ventures face in partnering — and the solutions the studies suggest — focus on mature markets, such as the United States and Europe. Far less is known about how multinational corporations should engage with startups in emerging markets such as China and India — even though those markets already boast the presence of prominent multinational companies such as Amazon, Google, IBM, Microsoft, and SAP.

To understand how multinational companies have partnered successfully with startups in emerging markets, we undertook a study in three major emerging market economies: India, China, and South Africa. (See “About the Research.”) Our research uncovered four key factors that multinational companies confront in such partnerships in emerging markets. We also unearthed four strategies — one corresponding to each of the factors — to help global companies engage with startups in emerging markets more effectively. (See “Key Factors in Partnerships With Startups in Emerging Markets.”) While some factors may be more potent than others for a given multinational corporation, all four of these strategies are worth paying attention to. They are mutually reinforcing, interrelated strategies and should be viewed holistically rather than in a piecemeal fashion.

Benefit of Demonetisation uncertian says Nobel Laureate Economkst Paul Krugman

It is difficult to see major gains from India’s decision to drain out high-value banknotes from the economy, and the move might only force the corrupt to become more careful in the future, Nobel laureate and economist Paul Krugman said on Friday.

Instead, Krugman said, there will be significant-to-low costs to the so-called demonetisation, although he still saw India as a high-prospect economy.

Speaking at the 14th HT Leadership Summit, the 63-year-old economist said there was a good case to be made that high denomination banknotes didn’t serve a legitimate purpose.

“But that did not happen here. High-value notes are not being eliminated. This seems like a one-off attempt to flush out illicit cash,” Krugman said of the government decision to scrap 500-and 1,000-rupee bills to purge the economy of illicit “black money”.

The government has issued new 500-and 2000-rupee bills, and said it will later bring back new Rs1000 notes as well.

Krugman, who won the Nobel in 2008 for his work on global trade, said while he could understand the motivation for demonetisation, the move was “highly disruptive”.

But could such an exogenous shock transform behaviour? “I would be happy to be proven wrong. There could be some permanent change in behaviour. People will be more careful and sophisticated in laundering their money in the future,” he said.

Krugman said Indian economy, to him, looked like “China with a 15-20 year-old lag”.

“It has reserves of entrepreneurial rigour, reserves of educated people, wide use of English, and unlike China, it has not hit the demographic wall. It has a lot of potential.”

Watch | What Paul Krugman thinks is the Change India Needs

With Such A Large Population, There'll Be Queues, Says Arun Jaitley 12-03

Finance minister Arun Jaitley

• With every passing day, remonetisation process will go on: Jaitley

• India always honestly tried to improve relations with Pakistan, current PM took a lot of initiatives: Jaitley

• I think our way of conducting economy was primarily responsible: Jaitley

• Finance minister says the way things are changing, we can’t defy technology and decision of demonetisation has only accelerated this

• If you look at the temperament of this country there is always a section which is reluctant to change: Jaitley

• Demonetisation will make political funding more transparent: Arun Jaitley 

• Once remonetisation process is completed and GST is implemented, it will have a huge impact on India’s businesses: Jaitley




• 300,000 people are picked up for tax return scrutiny every year: Jaitley

• We are still at the cusp of change and therefore many people in India are trying to beat the system. The battle between them and taxman will continue: Jaitley

• World’s largest democracy is very hush-hush when it comes to political funding, says Jaitley
• Long term effects of demonetisation are going to be huge: Jaitley

• India is at a stage that we’ve been the fastest growing economy in the world, says Finance Minister

• From a developing economy to a developed one, we have come a long way in 70 years: Jaitley

• We have 23 cr e-wallets in circulation, and it started only one-and-a-half years back: Jaitley

• 80 crore debit and credit cards in circulation out of which 45 crore are in circulation. Almost 20 crore-wallets: Jaitley

• The volume of formal trade, volume of business will grow in size: Jaitley

• One of the advantages of this exercise is that you will reduce the quantum of paper currency: Jaitley

• The country at large has welcomed the demonetisation decision, says Finance Minister Jaitley

• Demonetisation had to be a closely guarded secret, says Arun Jaitley

• If you need to replace 86% of a country’s cash currency, you have to have a substantial part ready: Arun Jaitley

• Finance minister Arun Jaitley and NDTV Consulting Editor Vikramchandra have taken the stage for the first HTLS session.

Liza Donnelly, staff cartoonist with the New Yorker, is live-cartooning the sessions during the summit.

Emerging Markets Are Still the Future 04-29

Image Credit : Shyam's Imagination Library

Remember when emerging economies were supposed to save us all? After the 2008 financial crisis, the traditional engines of global growth—the U.S., Western Europe, and Japan—stumbled into recession. To the rescue came the once-poor developing world. China, India, Brazil, and other up-and-comers powered the global economy through the historic downturn. The meek were inheriting the earth.

Not completely, as it turns out.

Today, as the U.S. recovery gains steam and even debt-burdened Europe stirs to life, the emerging world has tumbled into trouble. Growth is slowing, currencies are plunging, and investors are fleeing. Fears of a protracted slowdown in China sparked a worldwide stock selloff in August. The turmoil has even resurrected terrifying memories of previous emerging-markets crises, like East Asia’s rout in 1997, igniting jitters that the fragile global economy faces yet another financial debacle.
But international investors are making a big mistake. The emerging world will be just fine, thank you. The global business community is allowing short-term uncertainty to cloud the long-term reality of the changing global economy: Emerging markets are still our future.

There are certainly a host of reasons to be down about the developing world at the moment. Hypercharged growth rates have cooled just about everywhere. The International Monetary Fund forecasts that the output of emerging economies will rise only 4.2 percent in 2015, a sharp drop from 7.4 percent five years ago. Brazil and Russia, both proud members of the BRIC group of large developing nations, are in recession. China, the supposed juggernaut of the emerging world, has seen growth drop to its lowest rate in a quarter century.

China, Brazil, and Russia are struggling, but other developing economies are posting strong growth
Terrible policy is to blame. Politicians have been complacent about implementing the reforms necessary to keep growth going. China is example No. 1: Its top leaders have done little to overhaul an outdated, investment-heavy growth model. They’re still procrastinating about changes that would unleash the private sector, open markets, and improve productivity—all crucial for prosperity.

In India, perhaps the only major emerging economy with sound prospects right now, Prime Minister Narendra Modi has yet to prove he can walk his bold talk of deregulating the economy to encourage investment. On Aug. 30, Modi announced he wouldn’t renew a controversial executive order that loosened restrictions on the purchase of land for industrial projects—a major setback to his efforts.
Then there’s Vladimir Putin, who has strangled his oil-dependent economy by favoring an aggressive foreign policy and isolating Russia from the West, forgoing the investment and technology his country needs to advance.

All this is happening while the international environment remains uncertain. Although growth in the U.S. and Europe is improving, the developed world may not be strong enough to buy more of the exports of developing nations, sparking a recovery among them. Investors have also been spooked by the expectation that the U.S. Federal Reserve will begin raising interest rates for the first time since the 2008 financial crisis. That could suck cash from developing economies (as U.S. assets become more attractive) and raise their borrowing costs—a potential double whammy for their already subdued growth prospects.

As a consequence, a torrent of cash has fled the developing world. Investors yanked more than $900 billion from the world’s 19 largest emerging economies over a 13-month period ended in July, according to NN Investment Partners, a Netherlands-based asset-management firm. That’s almost double the amount pulled at the depths of the 2008 financial crisis. Currencies have taken a beating. The Indonesian rupiah and Malaysian ringgit recently touched lows against the U.S. dollar last seen during the late-1990s Asian financial crisis.

What’s significant is that the developing world has endured such drastic capital outflows without tumbling into a full-fledged economic meltdown, proof of its new resilience. Neil Shearing, chief emerging-markets economist at research firm Capital Economics, deemed predictions of an impending crisis “overblown.” “It is striking,” he wrote in an August report, “that many [emerging-markets] currencies have lost up to half their value over the past couple of years, without triggering widespread financial stress.” Shearing noted that the level of foreign-currency debt of most developing economies is lower than it has been in the past, making them less vulnerable to weakening currencies.

Other economists point to external surpluses and larger currency reserves in many Asian emerging economies as indicators of their financial strength. Of course, these circumstances don’t ensure a crisis won’t happen, but they make one much less likely.

Nor should higher U.S. interest rates be as damaging as many investors fear. In a June study, HSBC economist Frederic Neumann and strategist Jessica Wu analyzed previous Fed tightening cycles and discovered they’d left emerging Asia “relatively unscathed,” at least in initial stages.
Going further, Michele Mazzoleni, vice president at California-based investment manager Research Affiliates, calls the whole notion that rising U.S. rates are automatically bad for emerging economies a “myth.” Historical evidence shows that when interest rates rise on the good news of a strong U.S. economy—the reason behind any Fed tightening now—capital flows into emerging markets. Not only does a healthy U.S. bolster overall global growth, Mazzoleni reasons, it also enhances investors’ appetite for risk. “What is good for the United States and other developed economies is also good for the emerging world,” he believes.

While high-profile developing countries may be struggling, others continue to excel. Many of today’s better performers sat on the sidelines during the developing world’s big growth surge of the late 20th century and are just joining the party—a sign that the emerging-markets story is becoming broader. The Philippines, long a laggard in supercharged Asia, is expanding at about 6 percent annually. Myanmar, coming out of self-imposed seclusion, is growing at more than 8 percent. Once-dormant African economies are showing promise. Ethiopia, for decades a symbol of poverty, is expected to expand by 8 percent or more through 2017. The IMF forecasts that a large group of low-income countries will grow 5.1 percent in 2015 and 6.2 percent next year.

None of this is to say that challenges don’t remain. Growth cannot be sustained without painful reforms requiring political will—a critical ingredient that’s been in short supply. In Brazil, for instance, corruption scandals are paralyzing the government of President Dilma Rousseff as growth tanks; in Indonesia, newly installed President Joko Widodo hasn’t yet lived up to his reputation as a reformer; Shearing at Capital Economics says Turkey is a potential trouble spot as well.

Nonetheless, the long-term story hasn’t changed. The middle class in the U.S. and Europe will continue to be a pillar of the global economy, but the world’s new consumers—and new growth engines—will still be found in developing, not developed, countries. Even if the Chinese leadership fails to shift from investment-dependent to consumption-led growth, consumer spending in China will grow 60 percent over the next decade, according to the Demand Institute, a think tank. In a 2012 study, HSBC researchers prognosticated that almost 3 billion people will enter the ranks of the middle classes by 2050—nearly all in emerging economies. That would create a seismic shift in the world economy: Consumption in emerging countries could account for almost two-thirds of the global total in 2050, a significant increase from only about one-third today.

Where stock markets, currencies, and growth rates will head in coming months may be unclear. That the meek will eventually inherit the earth is not.

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Harvard Atlas for Economic Complexity 03-12

New Growth Projections Predict the Rise of India, East Africa and Fall of Oil Economies

May 7, 2015

Growth Projections based on 2013 Global Trade Data

May 7, 2015

Rank	Country	Projected Annual Growth Through 2023 (%)
1	India	7.89
2	Uganda	7.00
3	Kenya	6.74
4	Malawi	6.54
5	Tanzania	6.54
6	Egypt	6.03
7	Madagascar	5.85
8	Zambia	5.82
9	Senegal	5.53
10	Philippines	5.53
11	Mali	5.37
12	Guatemala	5.30
13	Turkey	5.29
14	Kyrgyzstan	5.25
15	Indonesia	5.15
16	Pakistan	5.13
17	Zimbabwe	4.93
18	Vietnam	4.91
19	Malaysia	4.89
20	Thailand	4.89
21	Jordan	4.78
22	Mozambique	4.63
23	China	4.56
24	Ghana	4.50
25	Yemen	4.45
26	Mexico	4.43
27	Ethiopia	4.41
28	Israel	4.38
29	Tunisia	4.18
30	Guinea	4.17
31	Cote d'Ivoire	4.05
32	Honduras	3.94
33	Belarus	3.91
34	Lebanon	3.87
35	Serbia	3.87
36	Korea, Rep.	3.85
37	Angola	3.71
38	Slovak Republic	3.69
39	Romania	3.67
40	Ukraine	3.65
41	Bosnia and Herzegovina	3.63
42	Switzerland	3.62
43	Brazil	3.62
44	Uzbekistan	3.62
45	Spain	3.60
46	Cambodia	3.53
47	Paraguay	3.52
48	El Salvador	3.50
49	Portugal	3.50
50	Bulgaria	3.49
51	Cameroon	3.46
52	Nigeria	3.44
53	Morocco	3.43
54	Poland	3.42
55	Sri Lanka	3.39
56	Tajikistan	3.38
57	United Kingdom	3.36
58	Mauritania	3.34
59	Hungary	3.33
60	Colombia	3.33
61	Congo	3.30
62	Bangladesh	3.29
63	Estonia	3.28
64	Papua New Guinea	3.27
65	Lao PDR	3.21
66	Slovenia	3.19
67	Croatia	3.19
68	Finland	3.19
69	Namibia	3.14
70	Greece	3.14
71	Dominican Republic	3.12
72	Ireland	3.09
73	Nicaragua	3.07
74	Canada	3.02
75	Czech Republic	3.02
76	Argentina	3.02
77	Latvia	2.99
78	Bolivia	2.97
79	South Africa	2.96
80	Costa Rica	2.94
81	Lithuania	2.91
82	Netherlands	2.84
83	Mongolia	2.81
84	Peru	2.77
85	Moldova	2.76
86	Belgium	2.74
87	Denmark	2.73
88	Saudi Arabia	2.66
89	Sweden	2.60
90	United Arab Emirates	2.53
91	Macedonia	2.53
92	Russia	2.51
93	Uruguay	2.41
94	France	2.37
95	Mauritius	2.31
96	Algeria	2.23
97	Japan	2.13
98	Ecuador	2.12
99	Oman	2.10
100	Kazakhstan	2.09
101	United States	2.09
102	Jamaica	2.04
103	Chile	2.03
104	New Zealand	2.01
105	Iran	1.97
106	Venezuela	1.93
107	Albania	1.91
108	Georgia	1.90
109	Kuwait	1.87
110	Gabon	1.80
111	Italy	1.62
112	Norway	1.61
113	Austria	1.60
114	Turkmenistan	1.57
115	Botswana	1.54
116	Azerbaijan	1.47
117	Qatar	1.36
118	Australia	1.36
119	Cuba	1.25
120	Libya	0.69
121	Trinidad and Tobago	0.67
122	Germany	-1.33

While the Atlas contains trade data for 128 countries, only 122 countries met the minimum requirements necessary for the methodology behind our growth projections.

Cambridge, Massachusetts – South Asia and East Africa top the list, while oil-driven economies face the sharpest fall in new growth projections and rankings of productive dynamism for 128 countries, as presented by researchers at the Center for International Development at Harvard University (CID). Using their own measure of economic complexity that captures the productive capabilities embedded in a country’s exports, CID researchers paint a new picture of the economic growth landscape, which foresees growth in emerging markets to continue to outpace developed countries. They also predict important reversals among growth leaders, with India expected to overtake China.

After decades spent trailing the growth of its northern neighbor and economic rival, India now tops the projections of annual growth rates to 2023. This finding adds to the recent debate over India’s own revisions to its 2014 growth statistics, which showed India’s growth edging out China for 2014.

Projections of GDP Growth to 2023 Rankings: Selected Top Countries

Source: The Atlas of Economic Complexity, 2015. Harvard Center for International Development. Note: Rankings out of 128 countries.

“Our Economic Complexity predictions find India’s disputed upper hand in growth will expand into a widening gap in the medium-term, with growth projections to 2023 predicted to be at 7.9 percent annually, well ahead of the 4.6 percent projected for China,” said Ricardo Hausmann, Professor of the Practice of Economic Development at Harvard Kennedy School (HKS), the leading researcher of The Atlas, and the director of CID.

Relative to China’s 9.1 percent annual growth of the past quarter century, this growth projection presents an important slowdown for China, but stands just below the 6 percent growth rate in 2020 predicted by the IMF and China’s leadership.

CID’s projections are also bullish on East Africa. Four East African countries – Uganda, Tanzania, Kenya, and Madagascar – rank in the top ten, with all predicted to grow at least 6 percent annually. The projections also favor Pakistan’s potential, at 5.1 percent predicted growth, presenting a clear picture of South Asia and East Africa’s positive growth outlook. Southeast Asia also includes several high-growth countries, driven by its largest country, Indonesia, which is anticipated to grow at 5.2 percent annually to 2023.

Outlooks for Europe and the U.S. show little optimism. The U.S. growth rate in 2023 is predicted to be 2.4 percent, while major European players range from 2.3 percent in Italy to 3.7 percent in Spain. Among OECD countries, Turkey holds the greatest optimism, at 5.3 percent growth. Overall, the model predicts significant convergence in global incomes, with significant catch-up in parts of Sub-Saharan Africa and Southeast Asia.

Economic Complexity Index: Rank of Expected GDP Growth to 2023

Source: The Center for International Development at Harvard University. Economic Complexity Index. 2015

“Countries accumulate productive knowledge by developing their respective capacity to make both more products, and products of increasing complexity—this underpins economic growth,” said Hausmann. “Countries like India, Kenya, and the Philippines have made important recent gains in diversifying their exports into more complex products. Historically, these gains in economic complexity have translated into higher incomes, which position them as the frontrunners globally for their growth prospects.”

CID’s projections are based on newly released 2013 global trade data and The Atlas of Economic Complexity, an online tool which measures a country’s productive knowledge and predicts its rate of growth. Productive knowledge – the knowledge that goes into making products – captures more relevant information as to the drivers of economic growth, to provide a more accurate explanation for why countries are rich or poor. The Atlas shows remarkable accuracy in predicting future economic growth. Relative to the leading measures of governance, competitiveness, and education, The Atlas’ Economic Complexity measures are found to best forecast growth rates—with 10 times greater accuracy than the World Economic Forum’s Global Competitiveness Index.

New Country Rankings in Economic Complexity

Along with the growth projections, CID released the new 2013 Economic Complexity Index (ECI). The ECI ranks countries based on the average complexity of their export basket, using the same indicator that generated the growth projections. Of the countries that made the greatest improvements in ECI from 2003-2013, four of the top five are in Sub-Saharan Africa: Zambia, Tanzania, Uganda and Malawi. The region is not uniformly improving, however, as Mauritania, Namibia, and Zimbabwe are among the group with the worst declines in ECI. Policy approaches toward diversification and the management of commodities, like oil, increasingly diverge within regions and underpin differing economic outcomes.

Biggest Winners and Losers in Economic Complexity: 2003-2013

Source: The Atlas of Economic Complexity, 2015. Harvard Center for International Development. Note: Rankings out of 128 countries.

The Economic Complexity growth projections underscore that not all exports are created equal. Rather, moving into greater productive diversity and more complex exports may hold the secret to countries’ growth prospects.

The countries that slipped the most in the complexity rankings are all commodity-driven economies, including Libya, Venezuela, Namibia, Georgia and Qatar. After a decade that saw oil prices triple to $98 at the end of 2013, oil-based economies translated higher prices into larger export value, becoming some of the fastest growing countries over the 2003-2013 period. This growth is not expected to be sustained; however, as CID’s growth projections show the concentration of exports in oil has come at the expense of greater diversification into other industries not as sensitive to price fluctuations. The dramatic decline in oil prices in mid-2014 bear out these risks: these oil-driven economies have witnessed downward revisions to their official growth projections, with a correction more closely aligned to the CID projections.

“Resource wealth appears to be rife with pitfalls that inhibit the diversification of productive knowledge into more complex areas, as seen from Libya to Venezuela to Qatar,” said Sebastian Bustos, a lead CID researcher on the project. “But this is not destiny, as Oman and the United Arab Emirates show the scope of what is achievable by focusing on productive capabilities and strategically increasing the complexity of one’s exports, starting from nearby products that rely on similar capabilities to those currently present in the country.”

The top of the rankings remain largely unchanged, with Japan, Switzerland, and Germany maintaining the greatest diversity in productive knowledge. The United States ranks 12th in the 2013 rankings, slipping four places over the prior decade. South Korea, by contrast, has shown the greatest rise among the leaders, up 13 spots to fourth. Other top risers are China (up 14 spots to 23rd), and Thailand (up 12 spots to 25th). When comparing a country’s ECI rankings to its income per capita over time, the growth projections look favorably on those countries, like Vietnam, that show the capabilities to produce more complex products than expected by its current income level. At 66th globally, Vietnam now outranks countries with significantly higher income per capita, like Chile (67th) and Australia (76th), as predictive of higher income growth in Vietnam. This pattern holds at the other extreme, too, where previous iterations of the rankings showed Greece as an outlier for having a higher income level than expected for its level of complexity, predicting a dip in growth.

Economic Complexity Index: 2003-2013 Country Rankings – Top 25 Countries

Source: The Center for International Development at Harvard University. Economic Complexity Index. 2015

About the Center for International Development

The Center for International Development (CID) at Harvard University is a university-wide center that works to advance the understanding of development challenges and offer viable solutions to problems of global poverty. CID is Harvard’s leading research hub focusing on resolving the dilemmas of public policy associated with generating stable, shared, and sustainable prosperity in developing countries. Our ongoing mission is to apply knowledge to and revolutionize the world of development practice.

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