The Dynamics of Nestedness Predicts the Evolution of Industrial Ecosystems
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...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | en_US |
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Public Library of Science
2013
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| Online Access: | http://hdl.handle.net/1721.1/77199 https://orcid.org/0000-0002-6031-5982 |
| _version_ | 1826189023559811072 |
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| author | Bustos, Sebastian Gomez, Charles Hausmann, Ricardo Hidalgo Ramaciotti, Cesar A. |
| author2 | Massachusetts Institute of Technology. Media Laboratory |
| author_facet | Massachusetts Institute of Technology. Media Laboratory Bustos, Sebastian Gomez, Charles Hausmann, Ricardo Hidalgo Ramaciotti, Cesar A. |
| author_sort | Bustos, Sebastian |
| collection | MIT |
| description | 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. |
| first_indexed | 2024-09-23T08:08:20Z |
| format | Article |
| id | mit-1721.1/77199 |
| institution | Massachusetts Institute of Technology |
| language | en_US |
| last_indexed | 2024-09-23T08:08:20Z |
| publishDate | 2013 |
| publisher | Public Library of Science |
| record_format | dspace |
| spelling | mit-1721.1/771992022-09-30T07:49:03Z The Dynamics of Nestedness Predicts the Evolution of Industrial Ecosystems Bustos, Sebastian Gomez, Charles Hausmann, Ricardo Hidalgo Ramaciotti, Cesar A. Massachusetts Institute of Technology. Media Laboratory Program in Media Arts and Sciences (Massachusetts Institute of Technology) Hidalgo, Cesar A. 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. 2013-02-26T21:17:01Z 2013-02-26T21:17:01Z 2012-11 2012-03 Article http://purl.org/eprint/type/JournalArticle 1932-6203 http://hdl.handle.net/1721.1/77199 Bustos, Sebastián et al. “The Dynamics of Nestedness Predicts the Evolution of Industrial Ecosystems.” Ed. Luís A. Nunes Amaral. PLoS ONE 7.11 (2012). https://orcid.org/0000-0002-6031-5982 en_US http://dx.doi.org/10.1371/journal.pone.0049393 PLoS ONE Creative Commons Attribution http://creativecommons.org/licenses/by/2.5/ application/pdf Public Library of Science PLoS |
| spellingShingle | Bustos, Sebastian Gomez, Charles Hausmann, Ricardo Hidalgo Ramaciotti, Cesar A. The Dynamics of Nestedness Predicts the Evolution of Industrial Ecosystems |
| title | The Dynamics of Nestedness Predicts the Evolution of Industrial Ecosystems |
| title_full | The Dynamics of Nestedness Predicts the Evolution of Industrial Ecosystems |
| title_fullStr | The Dynamics of Nestedness Predicts the Evolution of Industrial Ecosystems |
| title_full_unstemmed | The Dynamics of Nestedness Predicts the Evolution of Industrial Ecosystems |
| title_short | The Dynamics of Nestedness Predicts the Evolution of Industrial Ecosystems |
| title_sort | dynamics of nestedness predicts the evolution of industrial ecosystems |
| url | http://hdl.handle.net/1721.1/77199 https://orcid.org/0000-0002-6031-5982 |
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