Understanding the increasingly large gaps in income per capita across countries is one of the eternal puzzles of development economics. Our view is that complexity is at the root of the explanation, as argued by both Adam Smith (1) and the recent endogenous growth theories (2, 3), yet empirical research has not advanced along these dimensions because of the absence of adequate measures of complexity. Instead, it has emphasized the accumulation of a few highly aggregated factors of production, such as physical and human capital or general institutional measures, such as rule of law, disregarding their specificity and complementarity. In this article we have presented a technique that uses available economic data to develop measures of the complexity of products and of countries, and showed that (i) these measures capture information about the complexity of the set of capabilities available in a country; (ii) are strongly correlated with income per capita; (iii) are predictive of future growth; and (iv) are predictive of the complexity of a country’s future exports, making a strong empirical case that the level of development is indeed associated to the complexity of a country’s economy.

This article has not emphasized the process through which countries accumulate capabilities, but has instead focused on their measurement and consequences. However, the results presented here suggest that changes in a country’s productive structure can be understood as a combination of 2 processes, (i) that by which countries find new products as yet unexplored combinations of the capabilities they already have, and (ii) the process by which countries accumulate new capabilities and combine them with other previously available capabilities to develop yet more products.