[Graeme]

Researchers find a country's wealth correlates with its collective knowledge


$this->bbcode_second_pass_quote('', 'W')hat causes the large gap between rich and poor countries has been a long-debated question. Previous research has found some correlation between a nation’s economic prosperity and factors such as how the country is governed, the average amount of formal education each individual receives, and the country's overall competiveness. But now a team of researchers from Harvard and MIT has discovered that a new measure based on a country's collective knowledge can account for the enormous income differences between the nations of the world better than any other factor.

The researchers, led by Ricardo Hausmann, director of Harvard’s Center for International Development and former Minister of Planning for Venezuela, and Cesar A. Hidalgo, assistant professor at MIT’s Media Laboratory and faculty associate at Harvard’s Center for International Development, have published a book called The Atlas of Economic Complexity. Starting today, the book is free to download at http://atlas.media.mit.edu.

The authors plan to launch the book during an exclusive event at Harvard's Center for International Development on October 27th. Attendees will include chief economists of the World Bank and the Asian Development Bank, among other guests.

In the book, the authors show how the total amount of knowledge embedded in a country’s economy can be measured by a factor they call “economic complexity.” From this perspective, the more diverse and specialized jobs a country’s citizens have, the greater the country’s ability to produce complex products that few other countries can produce, making the country more prosperous.

[Outcast_Searcher]

Well that's a nice theory, but it is typical ivory tower impractical theory in the real world.

In a pure capitalist economy where EVERYONE had a real (preferably equal) incentive to work and a good opportunity for education, health care, access to services, etc. -- then yes -- such complexity would be ideal. An extra round of economic prosperity for everyone!

However, in the current state of the US under this administration, with calls for seemingly endless support for special interests (corporate and union and energy, for example), endless unemployment insurance, more unions, more social programs of every kind imaginable -- with a failing education system, a joke of a medical system, no energy plan, no serious infrastructure building or maintenance plan, etc. etc. -- we are so FAR from such an economy that any benefits from such complexity are GREATLY muted.

The key incentives to be honest, to have a good work ethic, and to believe in and support the system are key casualties -- creating a downward spiral that is harder to fix as we ignore the growing economic consequences to further various political agendas (left AND right).

So in theory - dandy. In the real world, governmental policy easily trumps this. (MAN are we screwed. I seriously need a drink...)

[Plantagenet]

Knowledge is good...but so is oil

4 of top 5 wealthiest countries are oil exporting states

[vision-master]

Having wealth within ourselves is not about material possessions.

[Shaved Monkey]

$this->bbcode_second_pass_quote('', 'A')USTRALIANS are the world's wealthiest people on a median basis and second in the world behind Switzerland on an average basis, according to a new report.
On a median measure Australian adults are worth nearly $US221,704 ($217,559), nearly four times the amount of each US adult.

The proportion of Australian adults worth more than $US100,000 is eight times the global average.

The high wealth rate in Australia is attributed to the strong Australian dollar, property ownership levels and a robust labour market.

Australia also has one of the highest home ownership rates in the world, with property making up about 65 per cent of consumers' wealth.

[vision-master]

Again, why is 'wealth' considered material stuff one owns?

Buddha Boy.....

[Shaved Monkey]

Because a man in a suit can put that information in a graph.
and
People wont chase carrots for knowledge they want bling
If you show off your knowledge to your neighbour he just wants to punch you in the nose .
If you show off your new car/TV/ barbecue/etc. he just wants to be like you.

sad but true in a cheap oil capitalist society.
Hopefully the wheel will turn as knowledge-less people try to barter their rolex for some home grown vegetables.

[vision-master]

lol

[dolanbaker]

$this->bbcode_second_pass_quote('Plantagenet', 'K')nowledge is good...but so is oil

4 of top 5 wealthiest countries are oil exporting states

[Shaved Monkey]

Corruption and mismanagement didnt help

http://en.wikipedia.org/wiki/Nauru_Phos ... ties_Trust

[Keith_McClary]

$this->bbcode_second_pass_quote('', '8'). Ireland - $45,600

This member of European Union has been often admired as one of the most modern knowledge economies in the world. Ireland is the largest maker of computer software in the world. A study done by The Economist ranked the Celtic Tiger to have the best quality of life in the world.

[dolanbaker]

$this->bbcode_second_pass_quote('Keith_McClary', '')$this->bbcode_second_pass_quote('', '8'). Ireland - $45,600

This member of European Union has been often admired as one of the most modern knowledge economies in the world. Ireland is the largest maker of computer software in the world. A study done by The Economist ranked the Celtic Tiger to have the best quality of life in the world.

[seahorse3]

How do they define wealth? Does debt mix into the equation? We are far more indebted in the West than many "poorer" countries, so, surely, they have excluded debt. Maybe debt is wealth? There's a good argument for that. Maybe they really mean the standard of living and not "wealth" which would imply to mean some analysis of what wealth is.

[The Practician]

$this->bbcode_second_pass_quote('seahorse3', 'H')ow do they define wealth? Does debt mix into the equation? We are far more indebted in the West than many "poorer" countries, so, surely, they have excluded debt. Maybe debt is wealth? There's a good argument for that. Maybe they really mean the standard of living and not "wealth" which would imply to mean some analysis of what wealth is.

[Pops]

Graeme, I notice your last couple "studies" have completely ignored energy, placing instead all of our modern virtues on smarts "we're smart and peacful" "we're smart and wealthy" ...

Where's the story about "we're peaceful, wealthy and smart because we're warmed and clothed and fed by 100 energy slaves each."



$this->bbcode_second_pass_quote('', 'A')fter coal and then the discovery of oil in the 1850s, Homo sapiens exploded to an astounding population of 7 billion in just 170 years. And non-renewable energy slaves paved the way. Oil, in other words, was a powerful Viagra for the species (with unwieldy erections and other side-effects).

Oil also broke all previous energy thresholds. While human population grew 5.4 times since 1850, per capita energy consumption exploded at a rate of 8.5 times. In fact total energy consumption jumped 45 times.

These extraordinary changes gave peasants vicarious lifestyles once only enjoyed by minor kings and queens. In 1850, the average Tom, Dick or Harry claimed but 2.2 fossil fuels slaves thanks primarily to machines powered by coal, says Hughes. But by 2009, each member of the average human family crowded their household with 93.8 slaves thanks to the combined work of oil, gas and coal. (Add wood, hydro and nuclear energy and another 17.6 diligent slaves must fit in the door.)

[evilgenius]

I think it is interesting what the article about the book has to say about specialization. Advanced societies do have a lot of specialization. I wonder if their studies delved into what has been going on concerning generalization? For example there is a lot of specialization going on in all forms of tech and marketing these days, all directed at an increasingly homogenized consuming audience. The interplay of tech and marketing does both lead and follow, not just one or the other, but these days to be considered a success seems more and more to mean leading or following a huge number of people all of a similar mindset.

I wonder if this might turn around over the next few decades? Things like the ability to print your own parts at home on 3D printers may be game changers. Tech could turn around, conceivably, and become something much more individually oriented in the years to come.

Or not.