PLoS ONE
Vol. 7, Issue 11, Pages 1-8
November 2012
Abstract
In economic systems, the mix of products that
countries make or export has been shown to be a strong leading
indicator of economic growth. Hence, methods to characterize and
predict the structure of the network connecting countries to the
products that they export are relevant for understanding the dynamics
of economic development. Here we study the presence and absence of
industries in international and domestic economies and show that these
networks are significantly nested. This means that the less filled rows
and columns of these networks' adjacency matrices tend to be subsets of
the fuller rows and columns. Moreover, we show that their nestedness
remains constant over time and that it is sustained by both, a bias for
industries that deviate from the networks' nestedness to disappear, and
a bias for the industries that are missing according to nestedness to
appear. This makes the appearance and disappearance of individual
industries in each location predictable. We interpret the high level of
nestedness observed in these networks in the context of the neutral
model of development introduced by Hidalgo and Hausmann (2009). We show
that the model can reproduce the high level of nestedness observed in
these networks only when we assume a high level of heterogeneity in the
distribution of capabilities available in countries and required by
products. In the context of the neutral model, this implies that the
high level of nestedness observed in these economic networks emerges as
a combination of both, the complementarity of inputs and heterogeneity
in the number of capabilities available in countries and required by
products. The stability of nestedness in industrial ecosystems, and the
predictability implied by it, demonstrates the importance of the study
of network properties in the evolution of economic networks.
Citation
Bustos, Sebastián, Charles Gomez, Ricardo Hausmann, and César A. Hidalgo,. "The Dynamics of Nestedness Predicts the Evolution of Industrial Ecosystems." PLoS ONE 7.11 (November 2012): 1-8.