The Secrets of Economic Growth

by Jörgen Eriksson on March 7, 2015

GrowthI read in The Economist Espresso this week that China´s economic growth may be “only” seven percent this year, down from 14% in 2007. At the same time most western economies struggle with close to zero or in recent years negative growth.

The picture below, from the World Economic Outlook database, shows the growth percentage in the worlds nations in 2013. It is true that the advanced economies have much higher gross national product per capita than the developing world, so a low percentage of growth in a western nation may anyway contribute to total global growth, however over the past decades this relation has changed substantially.

For example, in the 1980s the United States, long an engine of global growth, contributed about 1/3 to the worlds total economic growth. Now in the current times, the United States contributes about 1/7, whilst China now contributes 1/3.

Economic Growth 2013

Economic Complexity is like a game of Scrabble, says Ricardo Hausmann, the Director of the Centre for International Development and a Professor of the Practice of Economic Development at the John F. Kennedy School of Government at Harvard. The more letters you have, the more words you can make, the more capabilities a country has, the more diverse products it can generate.

Hausmann has concentrated his research efforts in two broad areas: the underlying determinants of macroeconomic volatility, financial fragility and crises; and the determinants of long run growth. In the video below from the World Economic Forum in January this year, Hausmann uses metaphors and metrics to explain the gap between rich and poor countries. I learned quite a lot watching this.

Ricardo Hausmann on the Secrets of Economic Growth

Below is a longer video with Hausmann, filmed at an interactive discussion about economic growth at the Harvard Kennedy School on May 16, 2014.

Interactive Dialogue on Economic Growth

The Building Blocks of Economic ComplexityFor the reader who wants to know more about Haussmann’s ideas, here is a link to his paper The Building Blocks of Economic Complexity. 

About Jörgen Eriksson :

Jörgen Eriksson is the founder of Bearing and is the Chairman of the firm since it was created. He has successfully expanded Bearing into covering projects on four continents. He is also Adjunct Professor of Innovation Management at the International University of Monaco and at Universitat Politècnica de Catalunya in Barcelona and he is an active member of the Founders Alliance organisation.

Working with consulting engagements across Bearings practices, he has over the past fifteen years participated in and supervised a large number of client projects, from innovation system development and place development and branding, to merger and acquisition assignments and leading edge research and business development activities for key clients.

His new book, Branding for Hooligans, will be published in 2015. It is about how innovation and branding are key survival factors in our modern times of hyper competitive markets.

Prior to Bearing, he was Director of Europe, Middle East, and Africa for Trema Treasury Management, a technology and consulting services provider, supplying financial software solutions for the global financial industry, Clients included The European Central Bank, Citibank, SEB, South African reserve Bank, Deutsche Bank, Abu Dhabi Investment Authority (ADIA), as well as many other large financial institutions and Fortune 500 companies.

Early in his career Eriksson was educated at the Stockholm School of Economics, where he studied economics, financial economics and philosophy. He then worked in Scandinavian investment banks and also for the Swedish Institute of National Defense Research.

You can contact Jörgen on e-mail jorgen.eriksson@bearing-consulting.com, connect on LinkedIn on http://fr.linkedin.com/pub/jörgen-eriksson/0/38/8a0/ and follow him on twitter on joreri508.

{ 1 comment… read it below or add one }

mahmoud Mohamed khallaf April 11, 2015 at 09:37

Hopefully scientific communication , especially in the field of agricultural economy and the world economy in general, as I am interested in obtaining financing and the granting of agricultural scientific research and, in particular topics: the empowerment of rural women in addition to getting the added value of agricultural plant waste in Egypt, processing and recycling of these residues
We hope to cooperate in the field of empowerment of rural women of income generation and integration of economic, social and environmental in poor communities and increase household incomes and access to the technological advantage and increase the added value of the remnants of post-harvest various agricultural crops of small farmers and get funding for that in developing

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