Knowledge base
1,824 claims across 19 domains
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economic complexity emerges from the diversity and exclusivity of nontradable capabilities not from tradable inputs
If all countries can access global markets for tradable inputs and outputs, why have income gaps exploded over two centuries? Hidalgo and Hausmann argue that cross-country income differences stem from variations in economic complexity, measured by the diversity of available nontradable "capabilities
trust is the binding constraint on network size and therefore on the complexity of products an economy can produce
If knowledge and knowhow must be accumulated in networks, and if network size determines the complexity of what can be produced, then the binding constraint on economic complexity is whatever limits network formation. Hidalgo, synthesizing Fukuyama, Putnam, Granovetter, and Saxenian, argues that con
attractor states provide gravitational reference points for capital allocation during structural industry change
An industry attractor state describes how the industry "should" work given technological forces and demand structure. As Rumelt frames it, the attractor state represents "a gravitylike pull" toward efficiency — meeting buyer needs as effectively as possible. This is not a prediction about what will
the personbyte is a fundamental quantization limit on knowledge accumulation forcing all complex production into networked teams
Hidalgo introduces the personbyte as the maximum knowledge and knowhow carrying capacity of a single human nervous system. This is a quantization limit: below one personbyte, the binding constraint on production is individual learning (experiential, social, and geographically biased). Above one pers
products are crystallized imagination that augment human capacity beyond individual knowledge by embodying practical uses of knowhow in physical order
Hidalgo draws a fundamental distinction between two kinds of products: those that existed first in the world and then in our heads (like edible apples), and those that existed first in someone's head and then in the world (like Apple computers). Only the latter are "crystals of imagination" -- physi
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