The Complexity of the Economy: A Path towards Development and Well-being

The Complexity of the Economy: A Path towards Development and Well-being One of the lesser-known but most revealing economic indicators is the Economic Complexity Index (ECI), developed by professors Ricardo Haussman from Harvard University and César Hidalgo from the Massachusetts Institute of Technology (MIT). This index provides us with an overview of the level of development and productive sophistication of a country at a given moment, highlighting the importance of economic diversification in achieving higher levels of well-being and development. Less complex economies tend to rely on extractive industries such as fishing or mining, while more complex ones are based on sectors like biotechnology, pharmaceuticals, aerospace, or robotics. A country's ability to evolve towards activities of higher productive complexity is reflected in its economic growth and the quality of life of its citizens. The ECI allows us to compare the economic development of different countries over time, demonstrating the transformation of economies that have invested in diversification and sophistication of their export offerings. Examples such as the Asian Tigers, South Korea, and more recently countries like Malaysia, Indonesia, or Vietnam, show how the focus on the production of high-tech goods and services has been key to their development. In Latin America, countries like Costa Rica and Mexico have followed a similar path, attracting investments in high-tech sectors that have created quality jobs and promoted the development of technical skills. Costa Rica has managed to overcome its dependence on raw materials through a focus on advanced technology and specialized manufacturing, while Mexico has attracted significant investments in sectors such as automotive, generating employment and positively contributing to the GDP. In this context, the presentation of Bill 7065/2023-CR in the Congress of the Republic aims to promote industrial development, service exports, and job creation through the Production, Manufacturing, or Maquila and Storage Regime (REMA). This project proposes a legal framework to incentivize foreign investment, promote industrialization, and enhance international competitiveness, betting on economic diversification and value-added generation. Promoting a more complex economy through the encouragement of high-tech sectors and the creation of quality jobs is essential for the development and well-being of a country. The experience of countries that have invested in productive diversification shows us that it is possible to transform the economic structure and achieve higher levels of development. It is necessary to continue moving in this direction to build stronger and more prosperous economies for the benefit of society as a whole.