Towards Complex Economies: a Gulf socio-economic profile

Why do the Swiss specialise in watchmaking, Japanese in denim or electrical equipment, and software in Silicon Valley? These are all examples of complex economic areas, but what makes them so? According to scholars, knowledge clusters are important drivers of trade sophistication, which in turn lead to complex economies (Hidalgo and Hausmann, 2009). The theory of Economic Complexity (EC) is defined as the systems of knowledge and interactions which make up a country’s productive output. Trade, namely a country’s export profile, is the most direct way of revealing the productive output. Beyond exports, the interactions in the product space (a network of exported goods) reveal the shared capabilities between producing different goods. Moreover, the foundation for those capabilities, whether in relation to goods or services, ought to be further explored.