The policy implications of economic complexity

• Published in: Research policy 2023-11, Vol.52 (9), p.104863, Article 104863
• Main Author: Hidalgo, César A.
• Format: Article
• Language: English
• Subjects: Economic complexity; Economics and Finance; Humanities and Social Sciences; Industrial policy; Networks; Relatedness; Smart specialization
• ISSN: 0048-7333; 1873-7625
• DOI: 10.1016/j.respol.2023.104863

In recent years economic complexity has grown into an active field of fundamental and applied research. Yet, despite important advances, the policy implications of economic complexity can remain unclear or misunderstood. Here I organize the policy implications of economic complexity in a framework grounded on 4 Ws: what approaches, focused on identifying target activities and/or locations; when approaches, focused on the timing of related and unrelated diversification; where approaches, focused on the geographic diffusion of knowledge; and who approaches, focused on the role played by agents of structural change. The goal of this paper is to provide a framework that groups, organizes, and clarifies the policy implications of economic complexity and facilitates its continued use in regional and international development. •We present the 4Ws framework for economic complexity policy, built around four key questions: what, when, where, and who.•We position economic complexity work in the context of classical economic development literature.•We explore the epistemological context of economic complexity research and its implications.