{"id":19097,"date":"2024-08-08T15:00:14","date_gmt":"2024-08-08T18:00:14","guid":{"rendered":"http:\/\/fund.ar\/publicacion\/a-practical-guide-to-analysing-the-economic-complexity-of-a-province\/"},"modified":"2024-10-16T12:22:18","modified_gmt":"2024-10-16T15:22:18","slug":"a-practical-guide-to-analysing-the-economic-complexity-of-a-province","status":"publish","type":"publicacion","link":"https:\/\/fund.ar\/en\/publicacion\/a-practical-guide-to-analysing-the-economic-complexity-of-a-province\/","title":{"rendered":"A Practical Guide to Analysing the Economic Complexity of a Province"},"content":{"rendered":"\t\t
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Economic Complexity is a methodology that measures the degree of knowledge that an economy accumulates about its different productive activities. Based on mapping of these activities, it makes it possible to diagnose the complexity of each region and plan a development perspective based on its capabilities. But what are the benefits of this method of analysis? An introductory guide to its operation in a provincial perspective based on employment data.<\/strong><\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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Economic Complexity is based on the idea that it is possible to infer how similar economic activities are to each other based on the capabilities required for their development. These capabilities refer to all the specific knowledge needed to produce a given good. To this end, Economic Complexity analyzes existing capabilities and how they are distributed among productive activities within the economies where they are developed. In this way, the EC allows us to infer the complexity of each region according to its acquired capabilities.<\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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Economic Complexity Utility<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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\n\t\t\t\t\t\t\t\t\tOne of the main uses of Economic Complexity (EC) is to identify which activities should be prioritized by the productive policy of a given economy. Although the main results may be previously known, EC also makes it possible to reveal options that are not so obvious. In addition, it provides the elaboration of metrics with a hierarchy of priorities and <\/b>trade-offs<\/i><\/b> for decision-making.<\/b>\r\n\r\nThe EC allows, for example, to establish which infrastructure works should be carried out to address their development, which is the qualification needs that these sectors demand and which educational programs should be promoted to ensure them. It is also a useful tool for identifying and correcting coordination problems with the private sector, and even within the public sector. In this sense, it is a valuable tool for improving the effectiveness of comprehensive policy designs beyond the scope of sectoral policy.<\/span>\r\n\r\nConcerning the above, EC can also be used in other areas of interest for public policies, such as development with a gender perspective or green financing. In other words, when selecting priority sectors or executing the policy, it is possible to relate the results of VC with these other variables and promote the development of complex sectors with a view to these issues on which we wish to have an impact.<\/span>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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Economic Complexity from Employment Data<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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In its beginnings, the EC methodology was based on export data. Numerous papers apply this approach to the analysis of Argentina (several of them can be found at this<\/span>\u00a0link<\/a>). Over time, the literature expanded the data for calculating the EC, including other sources, such as employment or patent data. <\/span><\/p>

This toolbox uses employment data to estimate the EC in the Argentine provinces. More specifically, data on registered salaried employment are used, excluding public employers that are not public companies and private household personnel, as they have a special regime. Private registered wage earners represent 60% of total wage earners and 48% of all registered workers\u00a0(Ministry of Labor, 2023<\/a>).<\/a> This perspective has some advantages and disadvantages. Among them, the most important are the following:<\/p>