The new paradigm of economic complexity.

Economic complexity offers a potentially powerful paradigm to understand key societal issues and challenges of our time. The underlying idea is that growth, development, technological change, income inequality, spatial disparities, and resilience are the visible outcomes of hidden systemic interactions. The study of economic complexity seeks to understand the structure of these interactions and how they shape various socioeconomic processes. This emerging field relies heavily on big data and machine learning techniques. This brief introduction to economic complexity has three aims. The first is to summarize key theoretical foundations and principles of economic complexity. The second is to briefly review the tools and metrics developed in the economic complexity literature that exploit information encoded in the structure of the economy to find new empirical patterns. The final aim is to highlight the insights from economic complexity to improve prediction and political decision-making. Institutions including the World Bank, the European Commission, the World Economic Forum, the OECD, and a range of national and regional organizations have begun to embrace the principles of economic complexity and its analytical framework. We discuss policy implications of this field, in particular the usefulness of building recommendation systems for major public investment decisions in a complex world.

Complex economic activities concentrate in large cities.

Human activities, such as research, innovation and industry, concentrate disproportionately in large cities. The ten most innovative cities in the United States account for 23% of the national population, but for 48% of its patents and 33% of its gross domestic product. But why has human activity become increasingly concentrated? Here we use data on scientific papers, patents, employment and gross domestic product, for 353 metropolitan areas in the United States, to show that the spatial concentration of productive activities increases with their complexity. Complex economic activities, such as biotechnology, neurobiology and semiconductors, concentrate disproportionately in a few large cities compared to less--complex activities, such as apparel or paper manufacturing. We use multiple proxies to measure the complexity of activities, finding that complexity explains from 40% to 80% of the variance in urban concentration of occupations, industries, scientific fields and technologies. Using historical patent data, we show that the spatial concentration of cutting-edge technologies has increased since 1850, suggesting a reinforcing cycle between the increase in the complexity of activities and urbanization. These findings suggest that the growth of spatial inequality may be connected to the increasing complexity of the economy.

Unveiling the geography of historical patents in the United States from 1836 to 1975.

It is clear that technology is a key driver of economic growth. Much less clear is where new technologies are produced and how the geography of U.S. invention has changed over the last two hundred years. Patent data report the geography, history, and technological characteristics of invention. However, those data have only recently become available in digital form and at the present time there exists no comprehensive dataset on the geography of knowledge production in the United States prior to 1975. The database presented in this paper unveils the geography of historical patents granted by the United States Patent and Trademark Office (USPTO) from 1836 to 1975. This historical dataset, HistPat, is constructed using digitalized records of original patent documents that are publicly available. We describe a methodological procedure that allows recovery of geographical information on patents from the digital records. HistPat can be used in different disciplines ranging from geography, economics, history, network science, and science and technology studies. Additionally, it is easily merged with post-1975 USPTO digital patent data to extend it until today.