Technology
Countries Ranked by Their Economic Complexity
Countries Ranked by Their Economic Complexity
In the past, the trade between nations was a much simpler matter to grasp. Commodities and a few finished goods moved between a handful of countries in a straightforward way.
Today, around 6,000 officially classified products pass through the world’s ports, and digital products and services zip across country lines creating an extra layer of difficulty in measuring economic activity.
To try to understand this enormous level of economic complexity, the team at Harvard’s Growth Lab have created the Country Complexity Ranking. Here’s a look at the top 50 countries in the ranking:
Rank | Country | Score | Top Export(s) |
---|---|---|---|
1 | Japan | 2.28 | Cars, ICT (tech) |
2 | Switzerland | 2.14 | ICT, gold, packaged medicaments |
3 | South Korea | 2.05 | ICT, cars |
4 | Germany | 2.02 | Integrated circuits, ICT, cars |
5 | Singapore | 1.81 | ICT, cars |
6 | Czech Rep. | 1.79 | Cars, vehicle parts |
7 | Austria | 1.71 | ICT, tourism |
8 | Finland | 1.69 | ICT |
9 | Sweden | 1.67 | ICT |
10 | Hungary | 1.64 | ICT, cars |
11 | Slovenia | 1.57 | Cars, ICT |
12 | United States | 1.47 | ICT, tourism |
13 | Italy | 1.42 | ICT, tourism |
14 | United Kingdom | 1.42 | ICT, finance |
15 | Slovakia | 1.41 | Cars |
16 | France | 1.40 | ICT, tourism |
17 | Ireland | 1.39 | ICT |
18 | Israel | 1.37 | ICT, diamonds |
19 | China | 1.30 | Electronic equipment |
20 | Mexico | 1.27 | Cars |
21 | Poland | 1.19 | ICT |
22 | Denmark | 1.18 | Transport, ICT |
23 | Belgium | 1.16 | ICT |
24 | Romania | 1.16 | ICT, vehicle parts |
25 | Thailand | 1.15 | Tourism |
26 | Netherlands | 1.04 | ICT |
27 | Estonia | 1.03 | ICT, transport |
28 | Malaysia | 0.95 | Integrated circuits |
29 | Belarus | 0.93 | Refined oils, ICT |
30 | Croatia | 0.92 | Tourism, ICT |
31 | Lithuania | 0.85 | Transport, refined oils |
32 | Spain | 0.85 | Tourism, ICT |
33 | Philippines | 0.75 | Integrated circuits, ICT |
34 | Portugal | 0.72 | Tourism, ICT |
35 | Canada | 0.69 | Crude oil, cars, ICT |
36 | Bosnia and Herz. | 0.65 | Tourism, ICT |
37 | Serbia | 0.65 | ICT |
38 | Turkey | 0.65 | Tourism, transport |
39 | Latvia | 0.64 | Transport, ICT |
40 | Bulgaria | 0.62 | Tourism, ICT |
41 | Norway | 0.56 | Crude oil, petrol. gases |
42 | Ukraine | 0.42 | ICT, transport |
43 | Cyprus | 0.38 | Tourism, transport |
44 | Tunisia | 0.34 | Electrical wire, tourism |
45 | India | 0.32 | ICT |
46 | Costa Rica | 0.30 | ICT, tourism |
47 | Uruguay | 0.29 | Tourism, wood pulp |
48 | Brazil | 0.24 | Soya beans, iron ore |
49 | Russia | 0.24 | Crude oil, refined oils |
50 | Lebanon | 0.24 | Tourism, ICT |
Japan, Switzerland, and South Korea sit at the top of the ranking.
Czech Republic – which was recently ranked as the most attractive manufacturing destination in Europe – has a strong showing, ranking 6th in the world. The United States slipped out of the top 10 into 12th position.
The Power of Productive Knowledge
Highly ranked countries tend to have the following attributes:
-
• A high diversity of exported products
• Sophisticated and unique exported products (i.e. few other countries produce similar products)
In short, the ranking hinges on the concept of “productive knowledge” – or the tacit ability to produce a product.
Muhammed Yildirim, of Harvard University, has thought up a useful analogy for thinking about the role of productive knowledge in the complexity of an economy:
“Suppose that each type of productive knowledge is a letter and each product is a word composed of these letters. Like the game of Scrabble, each country holds a set of letters with plenty of copies of each letter and tries to make words out of these letters. For instance, with letters like A, C and T, one can construct words like CAT or ACT. Then our problem of measuring economic complexity resembles interpreting how many different letters there are in each country’s portfolio. Some letters, like A and E, go in many words, whereas other letters, like X and Q, are used in very few. Extending this analogy to the countries and products, only those with a larger diversity of letters will be able to make more and more unique products. On the other hand, words that require more letters will be made only in the countries that have all the requisite pieces.”
Not All Exports are Created Equal
Much like the rack of letters in a Scrabble game, the elements of every export-driven economy can be broken down and quantified. The resulting categories encompass everything from rendered pig fat to integrated circuits, each contributing to the country’s overall score.
Agricultural and extractive industries tend to score lower on the complexity scale. Machinery can be highly complex to produce and is connected to many facets of the global economy.
Visualizing this overall mix of categories can provide a unique perspective beyond big picture numbers like GDP. Below are a few real world examples of export markets on both ends of the complexity spectrum.
Japan
Since this ranking began in the mid-1990s, Japan has never been bumped from the top spot.
Due to a restricted land mass and some ingenuity, Japan has become the prototypical example of a low-ubiquity, high-sophistication export economy.
Cars and electronics are obvious standouts, but there numerous other high-value product categories in the mix as well. The country also has a wide variety of high value exports and trading partners, lowering the risk of a trade war or industry downturn crippling the country’s economy.
Australia
Many will be surprised to learn that Australia sits in the lower third of this complexity ranking.
Although Australia’s global ranking is high in a myriad of categories – household wealth per person, for example – its economic complexity score is -0.60, much lower than expected for its income level. Looking at the breakdown below, there are clues as to why this might be the case.
Australia’s largest exports are in low complexity categories, such as minerals and agriculture. To compound matters, the country’s economy is heavily linked to China’s. To underscore this point, a recent study found that a 5% drop in China’s GDP would result in a 2.5% dip in Australia’s.
Venezuela
It’s no secret that Venezuela has seen some tough times in recent years. The chart below shows just how reliant Venezuela was on oil exports to sustain its economy.
An over-reliance on a single export can leave a country extremely vulnerable in the event of price volatility or geopolitical events. In the case of Venezuela, three quarters of their export economy was comprised of crude oil – one of the lowest scoring product categories in the ranking.
The Rush to Diversify
A low level of economic complexity isn’t necessarily a problem. Many countries with middle-to-low scores in the ranking have great standards of living and a high level of wealth. Countries like Canada, Norway, and Australia were all well down the list.
On the other hand, some countries have made diversification a priority. SoftBank’s $100 billion Vision Fund is partially the result of Saudi Arabia’s push to develop a diversified, knowledge-based economy. Other oil-rich nations, such as Kazakhstan, are also pushing to diversify in the face of the world’s evolving energy mix.
As world economies evolve and the shift from fossil fuels continues, we will likely see economic complexity increase across the board.
Technology
Nvidia Joins the Trillion Dollar Club
America’s biggest chipmaker Nvidia has joined the trillion dollar club as advancements in AI move at lightning speed.

Nvidia Joins the Trillion Dollar Club
Chipmaker Nvidia is now worth nearly as much as Amazon.
America’s largest semiconductor company has vaulted past the $1 trillion market capitalization mark, a milestone reached by just a handful of companies including Apple, Amazon, and Microsoft. While many of these are household names, Nvidia has only recently gained widespread attention amid the AI boom.
The above graphic compares Nvidia to the seven companies that have reached the trillion dollar club.
Riding the AI Wave
Nvidia’s market cap has more than doubled in 2023 to over $1 trillion.
The company designs semiconductor chips that are made of silicon slices that contain specific patterns. Just like you flip an electrical switch by turning on a light at home, these chips have billions of switches that process complex information simultaneously.
Today, they are integral to many AI functions—from OpenAI’s ChatGPT to image generation. Here’s how Nvidia stands up against companies that have achieved the trillion dollar milestone:
Joined Club | Market Cap in trillions | Peak Market Cap in trillions |
|
---|---|---|---|
Apple | Aug 2018 | $2.78 | $2.94 |
Microsoft | Apr 2019 | $2.47 | $2.58 |
Aramco | Dec 2019 | $2.06 | $2.45 |
Alphabet | Jul 2020 | $1.58 | $1.98 |
Amazon | Apr 2020 | $1.25 | $1.88 |
Meta | Jun 2021 | $0.68 | $1.07 |
Tesla | Oct 2021 | $0.63 | $1.23 |
Nvidia | May 2023 | $1.02 | $1.02 |
Note: Market caps as of May 30th, 2023
After posting record sales, the company added $184 billion to its market value in one day. Only two other companies have exceeded this number: Amazon ($191 billion), and Apple ($191 billion).
As Nvidia’s market cap reaches new heights, many are wondering if its explosive growth will continue—or if the AI craze is merely temporary. There are cases to be made on both sides.
Bull Case Scenario
Big tech companies are racing to develop capabilities like OpenAI. These types of generative AI require vastly higher amounts of computing power, especially as they become more sophisticated.
Many tech giants, including Google and Microsoft use Nvidia chips to power their AI operations. Consider how Google plans to use generative AI in six products in the future. Each of these have over 2 billion users.
Nvidia has also launched new products days since its stratospheric rise, spanning from robotics to gaming. Leading the way is the A100, a powerful graphics processing unit (GPU) well-suited for machine learning. Additionally, it announced a new supercomputer platform that Google, Microsoft, and Meta are first in line for. Overall, 65,000 companies globally use the company’s chips for a wide range of functions.
Bear Case Scenario
While extreme investor optimism has launched Nvidia to record highs, how do some of its fundamental valuations stack up to other giants?
As the table below shows, its price to earnings (P/E) ratio is second-only to Amazon, at 214.4. This shows how much a shareholder pays compared to the earnings of a company. Here, the company’s share price is over 200 times its earnings on a per share basis.
P/E Ratio | Net Profit Margin (Annual) | |
---|---|---|
Apple | 30.2 | 25.3% |
Microsoft | 36.1 | 36.7% |
Aramco | 13.5 | 26.4% |
Alphabet | 28.2 | 21.2% |
Amazon | 294.2 | -0.5% |
Meta | 33.9 | 19.9% |
Tesla | 59.0 | 15.4% |
Nvidia | 214.4 | 16.19% |
Consider how this looks for revenue of Nvidia compared to other big tech names:
$NVDA $963 billion market cap, 38x Revenue
$MSFT $2.5 trillion market cap, 12x Revenue$TSLA $612 billion market cap, 7.8x Revenue$AAPL $2.75 trillion market cap, 7.3x Revenue$GOOG $1.6 trillion market cap, 6.1x Revenue$META $672 billion market cap, 6x Revenue pic.twitter.com/VgkKAfiydx— Martin Pelletier (@MPelletierCIO) May 29, 2023
For some, Nvidia’s valuation seems unrealistic even in spite of the prospects of AI. While Nvidia has $11 billion in projected revenue for the next quarter, it would still mean significantly higher multiples than its big tech peers. This suggests the company is overvalued at current prices.
Nvidia’s Growth: Will it Last?
This is not the first time Nvidia’s market cap has rocketed up.
During the crypto rally of 2021, its share price skyrocketed over 100% as demand for its GPUs increased. These specialist chips help mine cryptocurrency, and a jump in demand led to a shortage of chips at the time.
As cryptocurrencies lost their lustre, Nvidia’s share price sank over 46% the following year.
By comparison, AI advancements could have more transformative power. Big tech is rushing to partner with Nvidia, potentially reshaping everything from search to advertising.
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