Simplifying Complexity What is your country good at?
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Mar 3, 2025 Ricardo Hausmann is the Founder of Harvard’s Growth Lab and an expert in economic complexity. He discusses how the breadth of knowledge within an economy directly impacts its growth potential. Key topics include the contrast between Austria's diverse export capabilities and Australia's focus on lower-complexity goods. He also explores cognitive proximity's role in economic development, highlights the importance of resource extraction in Australia, and envisions opportunities in a decarbonizing world, emphasizing Australia's potential in sustainable industries.
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Critique of Traditional Economic Models
- Ricardo Hausmann critiques traditional economic models for oversimplifying human capital and technology.
- He argues that these models fail to capture the diversity of knowledge within an economy.
Knowledge-Based Economic Model
- Hausmann proposes a new economic model based on the concept of knowledge as the fundamental building block of economies, similar to atoms forming molecules.
- He emphasizes the emergent properties arising from combining different types of knowledge.
Three Forms of Knowledge
- Humans transform the world using knowledge, encompassing both scientific understanding and technological know-how.
- This knowledge exists in three forms: tools, codes, and know-how.