Measuring Innovation Complexity—and Why It Matters
April 28, 2025
April 28, 2025 ・ minutes reading time
Innovation ecosystems are made up of the knowledge, technologies, and productive activities that drive new ideas and economic growth. Some ecosystems are more complex than others—drawing on a wider set of capabilities and connecting them in more structured ways to produce rare and valuable outputs. A well-known pattern in the literature is that countries whose exports are more complex tend to be wealthier. In this context, a country's complexity reflects the average complexity of the capabilities it possesses.
The typical way of calculating complexity is on trade data, as seen in the Atlas of Economic Complexity powered by Harvard's Growth Lab. However, when combining scientific, technological, and productive capabilities—a broader view of what countries are able to do, the same trend appears: countries with more complex innovation ecosystems also have higher GDP per capita. The upward trend holds across all continents, however, since the GDP axis is logarithmic, small vertical changes can represent big income differences. That doesn’t change the pattern, but it’s important for interpreting the scale.
Complex innovation ecosystems also tend to be diverse—they include a wide range of scientific, technological, and productive capabilities. On the chart, this is reflected in the size of the points, with larger dots representing more diverse ecosystems. Diversity and complexity are closely related, but not identical. Diversity counts how many different things an ecosystem can do; complexity also considers how rare and interconnected those things are. While both are linked to economic prosperity, innovation complexity turns out to be a better predictor of GDP per capita. In other words, it’s not just about doing many things—it’s about doing the right, high-value things in a connected way.
Why might this relationship exist?
First, countries with more complex ecosystems are able to combine knowledge from different areas to create new industries, adapt to change, and compete globally. Second, countries with many complex capabilities can branch into more advanced and profitable areas. This helps them avoid being locked into low-value sectors. That said, correlation is not causation. Many factors—like history, institutions, infrastructure, and education—also shape GDP per capita and influence how ecosystems develop.
Overall, innovation complexity adds to the growing evidence that complexity matters. It confirms a known relationship using a broader definition of innovation capabilities—one that reflects a broader range of what countries know, invent, and produce. In short, the more complex an innovation ecosystem is, the higher its potential for prosperity. This reinforces the case for investing in diverse, connected capabilities—not just in one domain, but across science, technology, and production.
