Interconnected global networks symbolizing trade, technology, and research, with a vibrant green canopy representing inclusive green growth

Beyond Trade: How Economic Complexity Drives Green Growth and a Sustainable Future

Mira Elwood in Climate & Environment August 2025 • 4 min read.

"New research reveals that integrating technology and research into economic complexity models is key to achieving inclusive green growth and reducing global emissions."

Achieving inclusive green growth requires a holistic approach, considering economic, social, and environmental factors. Traditional metrics of economic complexity, often derived from trade patterns, fall short by overlooking the crucial role of innovation. To bridge this gap, a groundbreaking study combines trade data with patent applications and research publications, offering new insights into international variations in inclusive green growth.

Sustainable development balances human progress with environmental preservation. This approach recognizes the interdependence of development and the environment, emphasizing that economic growth must be inclusive and green to be truly sustainable. Countries need to quantify and compare factors to achieve sustainable development.

Economic complexity methods offer a solution by using data on the geographic distribution of economic activities. Metrics have been validated by their ability to explain international variations in economic growth, income inequality, and emissions. These metrics work because they capture information about productive structures. Economic complexity metrics capture information about the sophistication of activities.

Why Trade Alone Isn't Enough: The Need for a Multidimensional Approach

Interconnected global networks symbolizing trade, technology, and research, with a vibrant green canopy representing inclusive green growth

While trade data forms the basis for many complexity metrics, it often misses key innovative activities, such as patent applications and research publications. Research and technology shape production processes, influencing worker skills, compensation, and the emission intensity of industries. Trade-based metrics can underestimate the complexity of economies distant from global markets, distorting predictions about inclusive green growth.

Australia, Chile, and New Zealand have natural resource exports that are far from markets. Their complexity is better reflected in outputs such as scientific research and patentable innovations than in sophisticated exports. Manufacturing economies deeply integrated into their neighbors' value chains have complex tradeable product sectors, but less sophisticated research and innovation sectors.

Trade Complexity (ECI trade): Measures the complexity of a country's export basket based on the diversity and sophistication of its products.
Technology Complexity (ECI technology): Assesses a country's technological capabilities using data on patent applications, reflecting its capacity for innovation.
Research Complexity (ECI research): Evaluates a country's research and development activities based on the quantity and impact of its scientific publications.

Recent studies have started incorporating data on patents, employment, and research papers to estimate the complexity of countries, cities, and regions. However, these metrics are rarely combined to explain the geography of inclusive green growth. The study introduces a multidimensional approach to economic complexity, combining data on exports, patents, and scientific publications to explain variations in economic growth, income inequality, and greenhouse emissions.

The Path Forward: Integrating Complexity for a Sustainable Future

By incorporating trade, technology, and research data, this study highlights the role of complexity metrics in inclusive green growth. Metrics of trade and technology complexity combine to explain international differences in economic growth and income inequality. Countries that score high in all three metrics tend to have lower emission intensities. These findings expand the knowledge about the role of economic complexity in inclusive green growth.

About this Article -

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This article is based on research published under:

DOI-LINK: 10.1038/s43247-023-00770-0,

Title: Multidimensional Economic Complexity And Inclusive Green Growth

Subject: econ.gn cond-mat.stat-mech cs.cy q-fin.ec

Authors: Viktor Stojkoski, Philipp Koch, César A. Hidalgo

Published: 17-09-2022

Everything You Need To Know

What is the key to achieving inclusive green growth, according to recent research?

The key to achieving inclusive green growth is integrating technology and research into economic complexity models. A multidimensional approach, combining trade, technology, and research, is crucial for unlocking sustainable development and environmental progress. This approach recognizes the interdependence of development and the environment, emphasizing that economic growth must be inclusive and green to be truly sustainable.

How do traditional metrics of economic complexity fall short, and what's the solution proposed?

Traditional metrics, often derived from trade patterns, fall short because they overlook the crucial role of innovation. They miss key innovative activities like patent applications and research publications. The solution proposed involves a groundbreaking study that combines trade data with patent applications and research publications. This multidimensional approach provides new insights into international variations in inclusive green growth and offers a more comprehensive understanding of a country's productive structure.

What are the key components of the multidimensional approach to economic complexity?

The multidimensional approach integrates three key components: Trade Complexity (ECI trade), Technology Complexity (ECI technology), and Research Complexity (ECI research). Trade Complexity measures a country's export basket based on the diversity and sophistication of its products. Technology Complexity assesses a country's technological capabilities using patent application data, reflecting its capacity for innovation. Research Complexity evaluates a country's R&D activities, based on scientific publications' quantity and impact. Combining these provides a more nuanced view of a country's economic complexity.

Why are countries like Australia, Chile, and New Zealand used as examples, and how do their characteristics influence the approach?

Countries like Australia, Chile, and New Zealand are used as examples because they rely heavily on natural resource exports and are distant from global markets. Trade-based metrics often underestimate their economic complexity. Their complexity is better reflected in outputs such as scientific research and patentable innovations. The multidimensional approach acknowledges this by including technology and research data, thus providing a more accurate representation of their economic capabilities and their impact on inclusive green growth.

How do the different complexity metrics relate to inclusive green growth and sustainability?

The different complexity metrics are crucial for understanding and achieving inclusive green growth. Metrics of trade and technology complexity combine to explain international differences in economic growth and income inequality. Countries that score high in Trade Complexity, Technology Complexity and Research Complexity tend to have lower emission intensities. By incorporating trade, technology, and research data, the study highlights the role of complexity metrics in understanding economic growth, emission levels, and how to achieve sustainable development, balancing human progress with environmental preservation.